David Pocock (ACT, Independent) Share this | Hansard source

In the interests of the committee's time, I might just make a few remarks and briefly foreshadow amendments that will be circulated later, for when we get to them, and then I have a proper question at the end if that's alright.

I've been a senator in this place for a short time, but, like all senators, I am conscious of history, and one thing that seems very clear to me is that this parliament will be judged on the way that it approaches climate change. We know that there is no time to waste, not just because the scientists are urging us and warning us, as we saw in the recent IPCC report, but because we are starting to live with the impacts. We are seeing the impacts across the country. Our farmers are feeling the impacts. Their profits are down 20 per cent since the year 2000 due to climate change. This is here. This is 1.1 degrees of warming that we're living with, and the consequences of moving beyond 1.5 degrees of warming are stark. We know that there are tipping points for cascading climate breakdown, and failure to take action is morally irresponsible.

This week, as a parliament, we are taking a significant step in the right direction. But, to be clear: the reform is far from perfect. We're a long way away from the ideal climate policy in Australia. Economists, including the Productivity Commission, tell us the most efficient way to encourage climate action is to put an economy wide price on carbon, as many other countries have done. This mechanism only covers the 215 heaviest emitters, as we have heard. We must ensure that we keep that in mind because it is very clear that this mechanism is not in line with the goal of 1.5 degrees of warming. It's a start, but our ambition is not enough. Furthermore, the whole mechanism is built on offsets, which we know should only be used as a last resort. In this policy, they're available without restriction. As has been noted, the only other country which allows unrestricted offsets is Kazakhstan.

But politics is all about compromise and getting things in place. This reform, while far from perfect, is a substantial step in the right direction. The reform will put downward pressure on emissions from the industrial sector, and that alone is the big change. Finally, businesses will have better incentives to invest in new technologies and decarbonise. For too long in this country the business community has been ahead of government on the issue of climate change. The businesses I speak to want to decarbonise to give themselves the edge in a competitive international environment. Many of our major trading partners are moving away from fossil fuels and starting to look for low- or no-carbon products.

It's up to us here in this place and those in the other to create a regulatory environment that will encourage the success of future industries like green steel and green aluminium. We need to incentivise decarbonisation so the businesses we want to form part of our future are able to decarbonise and remain here in Australia. I welcome the government's commitment to provide an additional $400 million from the Powering the Regions Fund to assist strategic industries like steel, cement and aluminium to decarbonise. But the reality is that the billion-dollar total is a drop in the ocean when it comes to the capital cost of technology transition and decarbonisation. We have seen the Inflation Reduction Act in the United States and a similar measure in the EU provide a huge boost for sustainable manufacturing. I call on the government to do more in the upcoming budget to support the businesses and industries that will drive future economic growth.

Businesses are not the only ones calling for action on climate. People around the country want us to take a step forward—a step that will result in actual reductions in emissions. They are clearly frustrated with the politics of climate change and want to get on with the job of making our future safe. My sense is that they want to step forward—a step in the right direction, even if it does not go far enough. This policy, despite its flaws, is a significant step in the right direction. Our heaviest emitters will reduce their net emissions by more than 200 million tonnes between now and 2030. Total emissions will come down. New fossil fuel projects will find it more difficult to set up, extract our resources and send them—along with hefty profits—overseas, while they continue to damage our climate, the climate that we share. And on the back of this new green industries will develop.

I would like to acknowledge Minister Bowen and his office for their work on the safeguard mechanism. Throughout discussions and negotiations with the minister there was much we did not agree on, but it was clear where the minister stood, and I thank him for the way he approached our conversations. Ultimately, a point was reached where I'm satisfied that the reform is a substantial step in the right direction, but we need to move a lot faster. This is just a step.

I call on the government to have more ambition as they formulate the many pieces of climate policy we will need to make up for the decades of inaction, so we can protect the people and places we love. There is so much work to do, from fuel efficiency standards to electrification across households and businesses, and the setting of a far more ambitious 2035 emissions reduction target.

But before we get to the safeguard mechanism before us, and I believe that this reform can be improved, I plan to move a series of amendments. As I said, to save the Senate's time I will foreshadow them now. Amendments (1) and (2) on sheet 1903 revised circulated in my name improve the way that offsets are used under the reform. Offsets are a very necessary part of this but should be reserved for hard-to-abate industries. They should only be used as a last resort, and this amendment will make sure that is the case.

Amendment (3) on sheet 1903 removes the price cap on ACCUs and limits the risk to taxpayers should the cap be breached. If we're going to have a market mechanism, I don't see a reason to put a ceiling on the price. If you're going to use the market to try and fix this, then it really doesn't make sense to cap it and, in doing so, potentially expose the Commonwealth and taxpayers to a liability should the Commonwealth run out of ACCUs.

The amendments on sheet 1915 discount the value of offsets if more than 50 per cent of compliance with baseline is achieved through offsetting. This will drive onsite abatement and bring forward investment in decarbonisation. If we're not going to have a hard cap on ACCUs there is provision in the regulation-making powers for the minister to discount ACCUs, referred to as the four-fifths rule, and I really believe this would be a valuable tool in imposing a carbon mitigation hierarchy which is well-established and acknowledged around the world. It makes sense for Australia to have one of them embedded in this legislation.

The amendments on sheet 1907 extend standing to allow third parties to challenge issues in the carbon market. This is simply an accountability measure that will improve the integrity of the carbon market. There has been much conjecture about certain methodologies. This whole reform hinges on integrity in offsets. It makes sense to me that people should be able to go through the process of challenging projects should they think that there are issues.

For me, the most significant detractor from this bill is the unlimited access to offsets. I have concerns that it is shifting a huge amount of emissions reduction onto the land sector rather than abating them on site.