Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

I rise to speak on the National Greenhouse and Energy Reporting Bill 2007. This bill establishes a single national framework for reporting greenhouse gas emissions, emission reduction actions, and energy consumption and production by corporations from 1 July 2008. A greenhouse reporting bill is necessary to underpin a national emissions trading scheme. Federal Labor has a longstanding commitment to implementing emissions trading as a sensible and flexible approach to reducing greenhouse gas emissions. It recognises that this legislation is fundamental to what it believes should be a growing bipartisan approach to tackling climate change. That is why Labor was surprised and disappointed that, in the first instance, the Minister for the Environment and Water Resources introduced into the House of Representatives such a sloppy bill—evinced in part by the fact that the government was required to amend its own legislation.

Labor recognises the urgent need for progress on emissions trading, but that does not excuse poor process or lack of consultation. Emissions trading is a significant economic reform—particularly as we need to address dangerous climate change—and we need to ensure that we get the underlying structures right. The bill before the chamber has a range of shortcomings. A major concern is the provision for the all-powerful Commonwealth reporting power to potentially usurp or marginalise state laws and programs. In the absence of Howard government leadership on climate change, the fact is that the state governments—rather than the federal government—have led the way. Their efforts should be supported rather than handicapped. This power is clearly unnecessary. Additionally, the thresholds and time lines are loose and slow so as to prevent an ‘as soon as practical’ introduction of emissions trading. Perhaps this was to be expected given the government’s plan for a slow and modest start to emissions trading by 2011 or 2012.

The chamber will be aware that Labor referred this bill, which was introduced with very little notice, to the Senate Standing Committee on Environment, Communications, Information Technology and the Arts for review. That Senate inquiry heard that this bill was put together without due consultation over a few weeks between July and August. Clearly that is simply insufficient time to produce legislation as important as this. That really follows in the footsteps of many previous bills which this government, since it attained control of the Senate chamber, has rammed through without proper consideration—the most famous one in the term of this parliament was of course the Work Choices legislation, which had hundreds of amendments to it, introduced about 20-odd minutes before it was debated in this chamber. The point to make about that, regardless of the politics of it, is that it is frankly sloppy legislative work from a government that does not feel it has to do that work because it has absolute control of the Senate.

Extraordinarily, in the context of that inquiry the department admitted that they had not consulted specifically with any of the stakeholders during the drafting of this bill. Perhaps this should come as no surprise given the hasty way in which legislation has been introduced into the parliament previously by the member for Wentworth. A notable example of the approach of the Minister for the Environment and Water Resources to these matters is the draft water bills—the National Farmers Federation, environment groups nor the state governments had an opportunity to look at those bills before they arrived in the parliament. It was only when Labor insisted upon the need for a Senate inquiry that this matter of substantial national significance was given at least some detailed consideration. Frankly, this government’s practice of dumping proposed legislation into the Senate with little opportunity for due and proper consideration confirms just how out of touch this Howard government is.

All the stakeholders who gave evidence to the inquiry identified significant problems with this bill. The inquiry heard, amongst other things, that the bill could deliver unintended consequences such as: significantly raising compliance costs; producing a fractured system which may not include all major emitters; obliging companies to seek judicial review; undermining both current and future state laws and programs on climate change, many of which are working effectively; and potentially cutting across other state laws and programs not at all connected to greenhouse gas emissions issues. A number of representations to the Senate inquiry, including from environment organisations, made the point that the reporting thresholds had all the appearance of being too loose and that it was critical that more information be publicly disclosed about the reporting under the proposed legislation. I note that the Investor Group on Climate Change, which represents some $370-odd billion of funds under management, was critical of the fact that the stipulated time frame is so slow.

As the bill is being rushed through parliament, it is worth the chamber considering the particular reasons why this legislation is being rushed through. The answer is very clear: until it believed it was politically necessary, the Howard government had done virtually nothing at all over its 11 long years in office to address climate change. There has been a systemic pattern of denial and inaction on climate change. That systemic pattern goes to, amongst other things, the question of setting up Australian businesses and the community to deal with climate change and the establishment of a market within which to operate so that emission reductions can have value. It is a matter of record that, on a number of occasions in the past, the Howard government has had the opportunity to consider emissions trading—these have included receiving cabinet submissions on that very matter, which were rejected. Now what we see is the Howard government suddenly realising that climate change is a matter of real interest to the Australian community—

Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | Link to this | Hansard source

And the Labor Party in the last 12 months.

Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

That is very interesting. I will take that interjection, Senator Colbeck. Senator Colbeck has made an assertion about the Labor Party’s position on this. You are in the government that is filled with climate change sceptics. You are led in this chamber by a senator who has made it clear that he questions whether or not human activity has had any impact on climate change. We know that this government, both in the cabinet and on the back bench, is filled with people who remain sceptical about the reality of climate change. Is it any wonder that you have been asleep on this issue for 11 years?

So, Senator Colbeck, if you and other ministers of the government want to come in here and lecture and try to make a political point, perhaps you should look at yourselves—because you know what? The Australian people know who has put climate change on the agenda in the political scene. The Australian people know that the only reason this government is doing anything at all on climate change is the upcoming election and that the government believes, or recognises, that it needs to be seen to be doing something to deal with the perception that it has done nothing over 11 years. It is all about spin; it is all about the election; it is all about politics. It is not about good policy; it is not about genuinely understanding and believing that climate change is a real challenge to this country. It is not about recognising the economic, social and environmental challenge that climate change constitutes; it is all about political spin. Just as we saw the water announcement in January being made without aspects of that package going to Treasury or Finance for costing, here we see yet another hasty, politically motivated response from the Howard government—a government that has been asleep on the issue of climate change for 11 years.

The government is now introducing legislation in an attempt to show that it is reacting in some way to the deficiencies of its past, which has arisen as a consequence of the government not being willing to embrace emissions trading as a way of tackling climate change. A sloppy bill like this suggests clearly that, at the time it was introduced, perhaps the environment minister had not really had a chance to look closely at it himself. The bill in the form introduced into the House of Representatives has the potential to increase uncertainty due to unintended consequences, including the introduction of legal ambiguities in relation to some of the clauses proposed.

I want to go for a moment to the issue of the government’s approach to climate change and the inconsistencies in its approach in general. Recently, in relation to the government’s position on the ratification of Kyoto, the environment minister said in the other place:

Kyoto may be amended, and we hope it will be. We will be part of that. We want to amend Kyoto.

That was what the Minister for the Environment and Water Resources, Mr Turnbull, said in the other place in a recent debate. It really was an extraordinary statement because, for the last 11 years, the Howard government has been all about bagging Kyoto. It has been critical of Kyoto. It has talked at various times about the Eurocentrism of this multilateral agreement. It has been denying—and decrying those who claim it—that Kyoto has an important role to play in addressing climate change. Now we have Minister Turnbull saying: ‘Kyoto may be amended; we hope it will be and we will be part of it.’

It would be useful to know whether or not the minister could explain how the government propose to be part of Kyoto if the government continue to refuse to ratify it. That really is the key question that the Howard government need to answer: how are they going to be part of amending the Kyoto protocol when the government in the first place refuse to ratify it and therefore cannot take a place at the table and vote on it?

We see the Howard government getting themselves into an extraordinary, illogical and ridiculous situation on this issue. It is no wonder international commentators and political leaders look upon the position that the Howard government have taken on the Kyoto protocol with some bewilderment. They have got themselves into a tortured, convoluted and contorted position when it comes to Kyoto. At the same time, I remind the chamber of various comments made by the Leader of the Government in the Senate. Senator Minchin is on record as saying:

Kyoto is a failed doctrine ... Therefore, by definition, it is doomed to fail.

That was the government’s previous position: Kyoto is a failed doctrine and therefore by definition doomed to fail. The question that we need to ask ourselves—and that, no doubt, Australians who are interested in this issue will ask themselves—is: which is the government’s position? They are clearly confused when it comes to the Kyoto protocol. Either it is a failed doctrine or we should commit ourselves, as Minister Turnbull has, to amending it.

I want to raise an issue in relation to the Sydney declaration, which occurred recently at the APEC meeting and which the government trumpeted as some great reform. In July last year in a speech to the Committee for Economic Development of Australia the Prime Minister said:

A central flaw of Kyoto is its reliance on a distinction between developed and developing countries which makes little sense when translated into global emissions.

But the Sydney declaration actually put this specific view:

The future international climate change arrangement needs to reflect differences in economic and social conditions among economies and be consistent with our common but differentiated responsibilities and respective capabilities.

That in fact is the Kyoto approach. Article 10 of the protocol says that all parties should act:

... taking into account their common but differentiated responsibilities and their specific national and regional development priorities, objectives and circumstances ...

So, really, the Howard government’s position on the Kyoto protocol and on climate change has become one of the most farcical public policy positions that any federal government has ever held. It is being exposed day after day, with contradictory statements by ministers such as those I have outlined.

In addition, notwithstanding the fact that the Prime Minister had been hostile not only to the idea of ratification but also to the notion that the United Nations Framework Convention on Climate Change would be the appropriate pathway to build multilateral agreement on climate change treaties into the future, we now see the much-trumpeted Sydney declaration include a specific recognition that the UN framework is the acknowledged and accepted pathway for future global climate change negotiations and formulation.

We know the Howard government’s position on climate change and the Kyoto protocol is all over the place. As I said previously, I suggest to the chamber that the reason they are all over the place is that they do not believe it. They are filled with climate change sceptics; they are filled at senior levels with people who do not believe that human activity has had an effect on or contributed to climate change. This has infected their public policy response. Theirs is a response driven by politics alone, not by belief and not by public policy considerations. That is why their position is, frankly, incoherent and inconsistent.

There is one further thing to note in the debate on this bill—that is, as a consequence of the public policy position taken by the government, we have seen an impact on the Australian economy. It is unfortunate that there has not been sufficient attention paid to the economic consequences of this government’s failure to embrace clean and renewable energy in Australia, its blind-minded and blind-eyed approach to the issue of Kyoto ratification and its denial of the opportunities that Australian companies could and should have to be involved in clean development mechanisms, joint initiatives and other measures that are linked to the protocol.

The fact is that, under the Howard government, renewable energy companies have voted with their feet. In August last year we saw a company close its wind turbine assembly plant in Northern Tasmania. The cost was 100 jobs—that is, 100 Tasmanian jobs went as a result of that decision. In February 2007, Pacific Hydro announced it was investing $500 million in Brazil because Australian renewable energy projects had been stalled by the government’s refusal to ratify the Kyoto protocol. I invite Senator Colbeck, the parliamentary secretary who is handling this bill, who is a Tasmanian senator, to indicate whether he is supportive of the fact that 100 Tasmanian jobs were lost as a result of the government’s position. Is that really his position? Is he seriously saying that it is a good thing, because of this government’s intransigence and failure to deal with this issue, that 100 Tasmanian jobs were lost? There has been a direct economic impact and a direct economic burden on our country, on Australian workers and on Australian industry as a consequence of the government’s position.

I make the point that the same company that closed its wind turbine assembly plant in Northern Tasmania has subsequently announced that its Portland factory will close in December 2007 because further investment cannot be viable in current market conditions. The reason for the unviability is that the Howard government has failed to establish a market in which these companies can operate and to provide the necessary services for reducing emissions and providing energy at the same time that many other countries—many of our competitor economies—have begun to do so. There is no market here for these companies to undertake these activities. As a consequence, companies are stranded and stuck, and the investment goes offshore and the jobs go with it.

A very strong business case lies in Australia accessing the Kyoto protocol. There are lost opportunities associated with emissions reduction projects; there are lost opportunities associated with the clean development mechanisms in other countries. The fact is that, under the Howard government, Australia and Australian companies continue to miss out. There is the opportunity for this nation to become a regional leader by establishing low-carbon projects in Australia that can generate carbon credits to other countries. There is an opportunity for this nation to become a regional hub for a global power carbon market—which is what many Australian businesses would like to see. Unfortunately, all of these opportunities have gone begging as a consequence of the Howard government’s stubbornness in respect of climate change and its refusal to ratify the Kyoto protocol. I move the second reading amendment standing in my name:

At the end of the motion, add “but the Senate:

             (a)    notes that:

                   (i)    the bill was hastily drafted without any genuine consultation with stakeholders, including state governments, industry groups and environment groups,

                  (ii)    the bill was hastily drafted and introduced so as to prevent due public and parliamentary scrutiny, and

                 (iii)    significant Government amendments were circulated less than 24 hours before the second reading debate so as to prevent due public and parliamentary scrutiny;

             (b)    is concerned that the bill does not reflect the urgent need to establish an effective emissions trading scheme; and

             (c)    therefore demands that the Government amend the legislation according to the unanimous recommendations in the report of the inquiry into the bill by the Environment, Communications, Information Technology and the Arts Committee”.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

I too rise to speak on the National Greenhouse and Energy Reporting Bill 2007. The Democrats support the objectives of the bill, which are to centralise and standardise the reporting requirements, to reduce the burden and the bureaucracy associated with reporting and to make public greenhouse and energy data available while maintaining confidentiality.

There is a crucial need for data and reporting on both greenhouse gas emissions and energy consumption in order to effectively inform policy development and energy market reform. This data is essential for the evaluation of government policies and programs and for the government to be able to measure and assess the performance of policies and evaluate if these policies are achieving the objective of a reduction in greenhouse gas emissions.

The initiative is long overdue. The government is very late to the game of collecting data on greenhouse gas emissions and energy consumption. The state governments, on the other hand, already require energy consumption reporting in order to administer their own greenhouse and energy programs. The initiatives of the state and local governments outreach the climate change policy initiatives of the federal government. Some of those state initiatives include: the Victorian renewable energy target, the Victorian energy efficiency target, the New South Wales Greenhouse Gas Abatement Scheme and the South Australian feed-in tariff. State initiatives would not be required if the Australian government were taking genuine action on climate change.

The government’s climate change policy is not informed by accurate data. It is also not informed by economic modelling and, therefore, is not strategic. A recent survey undertaken by the Australian Industry Group revealed that only one out of 10 Australian companies knew the volume of greenhouse gas emissions they were producing and felt they knew enough about climate change to manage the risks to their businesses. Only a quarter of these companies have tried to save water. The companies surveyed admitted that they were poorly informed about how to cut their greenhouse gas emissions or how climate change might affect their business. Seventy per cent of companies surveyed believed they had a responsibility to reduce their greenhouse pollution and were willing to use their own money and to increase the cost to their business. As the Chief Executive of the Australian Industry Group, Ms Heather Ridout, points out, there is a need for industry and the wider community to understand their obligations to be socially responsible, but the risks to industry competitiveness must also be managed.

Australia is one of the biggest wasters of energy in the world. Our demand for electricity is growing unchecked by almost 2½ per cent a year. By 2010 greenhouse emissions from the stationary energy sector are projected to be 153 per cent above 1990 levels. Australia’s energy consumption is projected to double by 2050. There is an urgent need for an annual investment of $6 billion in infrastructure—money that would be better spent in other areas if we achieved even modest levels of energy efficiency and reductions in energy use. Energy efficiency can make deep and cost-effective cuts in our fossil fuel use and our greenhouse gas emissions, and it could reduce the high levels of energy waste.

If our energy demand continues to grow unchecked then renewable energy and clean energy development chase a receding target. A one per cent energy efficiency target reduces the need for eight coal fired power stations and could permanently defer the need for nuclear power stations.

The European Union have just set a target of 20 per cent energy efficiency by 2020. If Australia adopted this achievable target, we could permanently defer the need for any nuclear power stations, reduce our greenhouse emissions, pay less on our electricity bills and cost-effectively transfer to renewable energy. Not only that but energy efficiency increases jobs, lowers inflation and improves our economy.

The current energy market framework does not serve this outcome. We still have a 1990s market and an energy market that rewards ever-increasing energy demand and does not address waste. We must remove barriers to and allow participation of energy efficiency and distributed generation in the energy market. Energy efficiency is a clear front-line climate change policy and the lowest cost greenhouse gas abatement action available, but not even the simplest actions and policies are being implemented by the government.

There is a clear market failure with regard to greenhouse action, energy efficiency and renewable energy. The state governments and even the environment groups are well ahead of this government in undertaking cost-benefit economic modelling for greenhouse action. This bill represents a step in the right direction, and the Democrats look forward to the data being used to inform government policy so they can at least catch up with the efforts of the states on greenhouse action.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise this evening to make some remarks with regard to the National Greenhouse and Energy Reporting Bill 2007, legislation intended to establish a national framework for reporting greenhouse gas emissions and certain abatement actions as well as energy consumption and production by corporations from the 2008-09 financial year. In rising to speak to this bill, I note that the Australian Greenhouse Office in 1998-99 went to great lengths to develop a framework for emissions trading, and it was shelved. Here we are all these years later, at the end of possibly the last sitting day of this government, and legislation is brought into the chamber to set up arrangements to actually measure greenhouse gases. I think that gives some indication of where we have been under the Howard government in relation to climate change.

Before I go to the substance of my remarks, I put the government on notice that there is one aspect of this legislation on which I would really appreciate an explanation. Since we are unlikely to go into committee, I give notice now so that, hopefully, when the government representative, Senator Colbeck, responds, he might be able to give some explanation in relation to it. It is with regard to clause 27(1A), which states:

... the Greenhouse and Energy Data Officer may refuse to disclose information under this section if satisfied that there would not be adequate security measures in place in relation to the confidentiality of the information.

Given that there are already secrecy provisions that govern these arrangements, I seek an explanation for that provision.

We should all remember that the Kyoto protocol was signed in 1997. Here we are a decade later and we are just beginning the process in Australia that the rest of the world has been engaged in for a decade. When Minister Robert Hill came home from Kyoto a decade ago, he boasted to the Australian community about what a fantastic job he had done in browbeating the rest of the world in achieving for Australia an increase in greenhouse gases on 1990 levels when the rest of the developed world all accepted cuts. The reason the developed world finally accepted, in the middle of the night, Australia wearing them down was that the rest of the world wanted Australia in the tent. They decided to compromise and allow Australia an increase.

In subsequent years, Australia continued to frustrate at almost all the United Nations Framework Convention on Climate Change and Kyoto protocol meetings. Of course, it was not until 2005 that the protocol was ratified. Australia took so little interest in this process that even in this last week the Minister representing the Prime Minister in this chamber told the Australian people that China had still not ratified the Kyoto protocol. Let me inform the government that China not only signed but ratified some time ago. China has been the recipient of substantial funding under the clean development mechanism.

Let me go back. When Kyoto was signed in 1997, there were three financial mechanisms under the protocol to be worked through: firstly, the clean development mechanism—investment from developed countries to developing countries; secondly, joint implementation—investment from developed to developed countries; and, thirdly, emissions trading. Over this last decade that has been worked through substantially. The Europeans developed their pan-European trading system and they made some serious errors. One of the errors was to trust the corporate sector to appropriately calculate the level of their emissions. What occurred was that the corporate sector inflated their emissions in order to come in underneath the free permits that they had been given and therefore trade in the market in what was essentially a false carbon saving.

We learnt from the emissions trading system in Europe that it is desperately important, if you are going to have an emissions trading system, for that system to have integrity and the integrity has to come from the measurements that you put in place. That is why the legislation here is so important and that is why it disappoints me, because we have to deal with greenhouse gas emissions and we have to deal with it urgently. The science tells us we have to deal with it urgently. Only this week the Antarctic scientists have told us that the ice melts both in the Antarctic and the Arctic are going much faster than any scientist anticipated. They are telling us that the IPCC report, for example, failed to incorporate ice melt and that the likely sea level rise is going to be much higher than the 59 centimetres predicted in the IPCC reports. So we know that we are faced with a catastrophe and I do not think the government believes that. And, even if it has now come around to believing that climate change is real, I do not get a sense from the government that there is any urgency. And urgency is the key thing because the scientists are telling us that global emissions have to peak by 2015 and then reduce. And there is no suggestion that is going to occur, because under this legislation emissions trading does not get up and running until 2012. That is way too late. The Europeans have been into it for a long time. Several states in the north-east of the United States have set up their own emissions trading system. They are all working together to try to make sure that they are consistent so that, when we get to a global emissions trading system, there will be an easy knit of those systems.

Australia is now in a position, having learnt from the experience of the Europeans, to do something comprehensive. But emissions trading by itself is insufficient to address greenhouse gas reductions, and that is the other problem with this legislation—that is, it is in isolation from a comprehensive policy framework. We have had that already. Emissions trading will not drive renewable energy rollout in Australia. You not only have to have a price on carbon; you also need a mandatory renewable energy target high enough to secure investment. You also need feed-in laws that give you a guarantee that the energy utilities will purchase renewable energy at a fixed price for a fixed period of time. You also need to look at this issue of land use, land use change and forestry. Again, we saw an example of that today where the government has rushed ahead with tax laws. Unfortunately they are not coming into this place. Again, this is the contempt that the Howard government has for the Senate. The House of Representatives have gone home because they know that there is a government majority in this place and it does not matter what we might want to do to amend legislation; they have got the numbers to block any amendments and so they have more or less thumbed their noses at the Senate and gone home. I hope that the community realises that having a majority in both houses is a very bad idea for good legislation, because you do not get it if you do not allow scrutiny of legislation through committees and then through amendments.

I now return to the issue that is in front of us with this particular bill. As I indicated in relation to that tax bill, the idea of addressing land use, land use change and forestry by bringing in a tax deduction for so-called carbon sinks without requiring permanence of those carbon sinks, without putting a time frame on it, is just a pork barrel for the plantation sector. Indeed, a plantation sector on this occasion will come from the cement industry, the coal fired power stations and the aluminium sector. As if it is not bad enough that we have the managed investment schemes out there distorting the market, we will now have the cashed-up energy sector investing in the establishment of trees without any hydrological analysis, without any requirement that those plantations be in any way biodiverse and without any requirement that they stay in the ground for any length of time. If you have a situation where you call a tree-planting a sink and you can log it at any time, it makes absolutely no sense and makes zero contribution to reducing greenhouse gas emissions. What you need is a comprehensive, integrated framework of policy which looks at emissions trading, which looks at land use, land use change and forestry and how that will intersect with food security and how that intersects with ecological integrity and ecosystem maintenance in terms of water. You also have to look at the financial mechanisms that will drive the rollout of renewables and you need regulation that will set in place national energy efficiency targets and energy efficiency standards for appliances and buildings and so on.

With this particular bill, the government made a huge mistake by squandering the goodwill of the states. The states have gone ahead and developed a lot of work on emissions measurement and they were going to go ahead with a national emissions trading system in the absence of the Commonwealth doing so. They agreed at a COAG meeting to establish a mandatory national greenhouse gas emissions and energy reporting system. They were prepared to give up some of their powers on the understanding that the Commonwealth would consult with them adequately and that there would be an agreed system. The minute the Commonwealth got that, the Prime Minister announced his emissions trading task force and, without any further ado or consultation with the states, the Commonwealth just drew up its legislation and made a total mess of it.

I am delighted that there was at least a one-day hearing where Senator Wortley from the Labor Party and I were able to sit all day and question everybody who came, and I am grateful to all of the representatives from state governments who came. Clearly there was an overwhelming case that clause 5 of this particular legislation had to go, because effectively it was overriding the states and undermining their ability to keep going with the good initiatives they had in place and the need for states to continue to collect appropriate data. I am pleased to say that as a result of that Senate inquiry evidence, which was so overwhelming, the government amended its original bill and has at least now recognised that it is not going to be able to override the states in the way that it wanted to. Also, the bill as it was previously drafted said that the federal government officer who was overseeing this only ‘may disclose’ information to the states and not ‘must disclose’.

Again, after considerable evidence, I am pleased that the federal government now understands that they must disclose information to the states. The states wanted reassurance that, if there was a dispute about information being freed up for them, there would be an appeal mechanism. I am glad to see that that has also been incorporated. But the issue that I would really like an explanation on—and it is important for the states that this is on the record—is what is meant by the energy data officer’s capacity to refuse to disclose information if satisfied that there would not be adequate ‘security measures in relation to the confidentiality of the information’? It is really important that we get an explanation from the government in this second reading debate as to what that means. Otherwise, the comfort that the government has given the states by replacing ‘may’ with ‘must’ will be undermined by that particular clause. I would appreciate knowing from the government what is actually meant by that.

Even though I welcome those changes, one of the real issues that remain with this bill is that the essential elements of a reporting scheme include comprehensive coverage of emitters, data at both corporate and facility level, reporting on a range of relevant activities, transparent and objective processes for calculating emissions and public accountability of the scheme. That is not included here because the government has given in to the Australian Industry Greenhouse Network, which desperately does not want public disclosure at a facility level. We now have a bill in which, although the data will be collected at the facility level, there is no requirement to disclose that data to the public. There are only aggregated totals across company levels and that is not going to give the public what it wants in terms of being able to hold companies to account. That is a mistake. There will now be no transparency for the public to know how emission permits are allocated. Even though there is an overwhelming body of evidence that all pollution permits should be auctioned, there is no doubt that a number of them will be allocated for free.

Unless you can have absolute transparent reporting at both facility and aggregate level, how can the community have any confidence in the integrity of any scheme? I think that is a real mistake. The thresholds are too high. They should have been much more stringent. Also, there is no need for the phase-in over three years, as is the case with this bill. We should be able to move much faster than that, and that is why I say that I do not think the government understands the urgency of dealing with climate change. The government does not understand that we are facing dangerous climate change and, in the face of that, we have to act quickly. We cannot sit around and wait for several more years to get this underway.

Our only insurance is if there is a change of government. Hopefully, we will then be able to come back and amend this so that we can put it in the context of a holistic set of measures on climate change. That will hopefully include land use, land use change and forestry. Hopefully, it will include the big emitters and be much more comprehensive because the thresholds will be different. Hopefully, we will also get much more urgency and transparency into the debate. If you do not have that transparency then you will end up with no public confidence in the system, as is the currently case.

The community’s right to know is not part of this bill. As I indicated, information at facility level is part of the community’s right to know. Only total gross greenhouse gas emissions and energy produced and consumed is made public. Australians will be very angry with a reporting system that allows for the information to be reported but to be then kept secret from them. The other issue is that we wanted to make sure that external auditors were accredited to avoid conflicts of interest, and the same applies to the greenhouse and energy data officer. There must not be a conflict of interest in any shape or form, because those positions are absolutely critical. Also, in order to get transparency and the appropriate compliance and enforcement, it is critical that there be opportunity for random audits and that the auditors be accredited so that we do not effectively have self-regulation. Self-regulation has undermined quality control in so many industries across Australia and, because it has been self-regulated for so long, the community has very little confidence in the land use, land use change and forestry sectors.

I finish by making the point that I do not think that the government fully understands what a mistake it has made in squandering the goodwill of the states. To get an effective emissions trading scheme you have to have cooperation at all levels of government and confidence at all levels of government that there is going to be a collaborative approach and a fair system. The states most certainly felt that they had been done over and, to use the words of one of the states, knifed by the Commonwealth. That is not the way to begin to set up the basis of what will be an extremely significant financial mechanism to address climate change.

I welcome the changes that the government has made. I am sorry that the transparency and the facility level is not there, and I would appreciate an explanation from the minister about what is meant by that the amendment that I referred to earlier. I hope that will give some additional comfort to the states that this is not a backdoor means of restricting information to them.

Simon Birmingham (SA, Liberal Party) Share this | Link to this | Hansard source

I rise to support the National Greenhouse and Energy Reporting Bill 2007 and seek leave to incorporate my speech.

Leave granted.

The speech read as follows—

I welcome the presentation of the National Greenhouse and Energy Reporting Bill 2007 and am pleased to endorse it to the Senate.

This Bill represents the latest in a long history of sensible, well planned and strategic steps taken by the Howard Government to address issues of climate change. It stands in stark contrast to the shallow approach of the Labor Opposition and the hyperbolic approach of the minor parties in this place.

The Liberal Party enjoys a proud history of environmental achievement, dating from our protection of the Antarctic in 1960, through the creation of Australia’s first Office of the Environment and appointment of the first ever Environment Minister. Liberal governments continued to lead on environmental measures with the protection of significant areas such as the Great Barrier Reef and Fraser Island, the banning of whaling and regulation of dumping at sea.

Upon election the Howard Government again led with the establishment of the Natural Heritage Trust, which has grown under this government to provide $5.1 billion for the protection and rehabilitation of Australia’s natural environment. This initiative was followed by enactment of the strongest environmental protection laws this country has ever seen, with passage of the Environment Protection and Biodiversity Conservation Act 1999.

These are just some of our many environmental achievements while in office. The environmental leadership of the Howard Government owes much to the stewardship of former Senator Robert Hill, who served as Minister for the Environment from our election in March 1996 through to November 2001. I had the pleasure of working for Robert at the time of the 1996 election and, with the debate of another piece of significant environmental legislation introduced by a Liberal Government, I pay tribute to the role Robert played in our environmental achievements and particularly in the pursuit of measures to address climate change.

Contrary to the comments made by other parties in this place and elsewhere, the Howard Government has taken climate change issues seriously and acted upon them from the very moment of our election in 1996. In 1997 the Prime Minister announced a $180 million package to reduce greenhouse gas emissions, followed in 1998 by the establishment of the Australian Greenhouse Office and a further $555 million package to establish world leading systems for measuring and monitoring greenhouse gas emissions as well as minimum energy performance standards for a range of appliances and equipment.

In 2000 the Government passed the Renewable Energy (Electricity) Act 2000, which established the Mandatory Renewable Energy Target Scheme and has helped to drive the growth of renewable energy sources across Australia.

All up, this government has invested $3.4 billion to date in measures to tackle climate change and, unlike many of those countries who did ratify the Kyoto Protocol, we have enjoyed success in implementing change that puts us on track to meet our agreed emissions targets.

This is a government that has taken climate change seriously, invested in it, acted upon it and achieved results. It is a proud record that has been achieved while maintaining strong economic growth and ensuring all actions taken are in the interests of all Australians.

We are now taking new steps to implement the latest in our planned measures to tackle climate change—the introduction of an emissions trading scheme.

In my short time as a member of this parliament I am proud to have been part of a government that has proposed two significant environmental measures. The Water Act 2007, which rightly seized federal control over aspects of the management of the Murray-Darling Basin and is part of the largest investment in our river systems in Australian history, and of course the Bill before us today, which will make an emissions trading scheme possible.

I acknowledge the work of the current Minister for the Environment, Malcolm Turnbull, in pursuing these measures. This Bill, in forming our first step towards emissions trading, is a vital component of the Howard Government’s multi-faceted approach to tackling climate change. It stands as part of our initiatives to reduce emissions across the Australian economy and encourage greater efficiency, while also working with the international community towards truly global approaches to addressing climate change. The approach of this government seeks the involvement of all countries, so as to ensure meaningful global emissions reductions, and took a major step forward thanks to the Prime Minister’s leadership at the recent APEC meeting.

This Bill will establish a world leading emissions reporting scheme that will cover between 70 and 75 per cent of total emissions in Australia, or almost 100 per cent of industrial emissions and mining emissions. The coverage of this scheme is greatly extended by the incorporation of transport and other fuels as well as the inclusion of all six classes of gases identified by the Kyoto Protocol, and will see some 700 Australian companies having to report on their emissions.

Minister Turnbull outlined the importance of this legislation to the establishment of an emissions trading system in his second reading speech, stating that:

“Robust data reported under this bill will form the basis of emissions liabilities under emissions trading, and will inform decision making during the establishment of the emissions trading system, including with regard to permit allocation and incentives for early abatement action. The bill will establish a single, national framework for reporting greenhouse gas emissions and abatement actions by corporations from 1 July 2008.”

Ultimately companies emitting more than 50 kilotonnes of carbon dioxide equivalent, producing more than 200 terajoules of energy or consuming more than 200 terajoules of energy will be required to report their emissions to a new statutory officer, the Greenhouse and Energy Data Officer.

This system will give Australia a uniform, national reporting framework that should facilitate the removal of duplicative arrangements developed by many state and territory governments.

The Senate inquiry into this Bill heard and accepted concerns from State Governments about their access to data and continued capacity to collect data themselves as a result of the initial draft of this Bill. I understand the Government has accepted these concerns and the legislation is being amended accordingly, but I would urge the States to, so far as is practical, utilise the data that will be obtained under this Bill and not impose additional costs on businesses by duplicating these reporting requirements.

The arrangements put in place under this legislation will begin to give effect to the recommendations of the Prime Ministerial Task Group on Emissions Trading, which has ensured the government offers clear policies to reduce emissions into the future. As part of this, the Government will take scientific and economic advice to establish a realistic reductions target next year, which will guide the operation of our trading scheme. By comparison, Labor claims to have a target, established by media release rather than science or economics, and further offers no plans to achieve its target. The Howard Government has the policies to achieve change and will ensure the targets to which Australia commits are achievable and in the interests of all Australians.

I welcome this Bill and the establishment of a world class emissions trading scheme in Australia. I am sure that such a scheme will see the market respond and adapt as needed, in order that emissions be reduced to the target levels that will be set. This market driven response highlights the economic significance of addressing climate change. It will require careful economic management, which is why the Howard Government is best placed to continue managing this important issue.

The market may respond with clean coal options, such as a carbon sink like that proposed by great South Australian company Santos in the Cooper Basin. This project, to capture and safely store carbon dioxide deep underground as the Cooper Basin oil and gas reservoirs reach the end of their useful life, has the potential to store up to 20 million tonnes of carbon dioxide per annum and up to one billion tonnes over its lifetime. This is one of the most exciting projects to be proposed in addressing greenhouse emissions and I truly hope to see it come to fruition.

Over time the market for carbon emissions will no doubt see further development of non-greenhouse gas polluting energy sources. Solar, wind or geothermal power will play a role, with the significant investment in these technologies already taking place. It may also be the case that nuclear power, which stands as the most reliable currently known base load generating alternative to coal fired power stations, could also play a role. If this proves to be economically and environmentally feasible I hope that petty, parochial politics does not stand in the way of such a development.

The challenge for addressing climate change is great. But in Australia we are already accepting our share of the global responsibility to reduce emissions and are acting to ensure such emissions are further reduced into the future. We are also acting to ensure the global response is equally as effective, otherwise our efforts will count for naught. This Bill helps to position Australia to maintain its positive, leadership role in addressing climate change. I commend it to the Senate.

George Campbell (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I seek leave to incorporate Senator Wortley’s speech.

Leave granted.

Dana Wortley (SA, Australian Labor Party) Share this | Link to this | Hansard source

The incorporated speech read as follows—

I rise to speak on the National Greenhouse and Energy Reporting Bill 2007.

This Bill is intended to provide a single conduit for reporting by corporations of their greenhouse gas emissions and abatement action from July 1, 2008.

It has been introduced as the first step towards the establishment of an emissions trading scheme.

With that objective in mind, the concept of this legislation is not difficult to support.

Over the past few years, the states have pushed for a national greenhouse reporting scheme at COAG, and industry groups have lobbied for various limits, conditions and exclusions to these efforts.

This Bill was foreshadowed by the Government earlier this year, after the announcement of the intent to establish a national emissions trading scheme.

As would be expected the major stakeholders expected they would be consulted during the drafting stage of the legislation.

Therefore, it was a major disappointment—and to the detriment of the document before us—that on this occasion this did not occur.

In addition to this lack of consultation, the Bill was hastily drafted and introduced into the Parliament, meaning there wasn’t time for full public and parliamentary scrutiny of its contents.

Introduced into the House of Representatives on August 15 of this year, the legislation includes the following aspects:

• Mandatory registration of controlling corporations with the national system,
• Requirements for registered corporations to keep records and provide reports,
• Requirements concerning the security and disclosure of information under the scheme,
• Compliance and enforcement arrangements, Administration arrangements (including the
• establishment of the position of Greenhouse and Energy Data Officer), and
• Compliance monitoring arrangements.

By the 2010-2011 financial year the provisions of the legislation would apply to approximately 700 companies which annually put out more than 50 kilotonnes of greenhouse emissions each.

However, the slow-start timeframe and the reporting thresholds that this Bill establishes may be insufficient to meet the reporting needs of an emissions trading scheme slated to start in 2010.

A major and recurring concern raised by the states about this legislation is that it has not accurately translated the spirit of cooperation, collaboration and consultation from the COAG talks on the subject.

Some of its clauses and provisions were an unwelcome surprise to the states, who had expected a different outcome when it came down to specifics.

Across a wider range of parties, other concerns voiced about the original Bill included that the proposed new Federal Government powers over state legislation and policies it provided for, looked to be on the excessive side—even harmful to the very essence of the legislation.

This most troublesome clause has been amended by the government, however this and other significant amendments were circulated less than 24 hours before the second reading debate so as to prevent due public and parliamentary scrutiny.

Indeed, overall there have not been appropriate timeframes for analysis of the Bill by those it will affect and those charged with bringing it into law.

It is a substantial document—it contains more than 50 pages—but was introduced into parliament with at short notice at the end of the last sitting week in August.

It’s no surprise, considering this, that potential “unintended consequences” of the Bill have been identified.

These include increasing the compliance burden on industry.

One example of this would be the legal costs likely to be incurred as stakeholders grapple with the ambiguities arising from the structure of the Bill.

There also may still be a risk this Bill could undermine current and future state-based programs which have been designed to tackle the challenge presented by climate change.

However, despite its flaws—and I will canvass these in some more detail later on—Labor supports this Bill because we believe in the general aim of the legislation.

Our country urgently needs a workable climate change strategy.

Labor is committed to the implementation of an emissions trading scheme.

Those on our side of the chamber see it as the most sensible and practical means of dealing with greenhouse gas emissions.

The more effectively we can monitor and record emissions data, the more effectively we can reduce and offset emissions.

So the heart of this legislation is in the right place.

However, because it has been put together in haste, without cursory—let alone comprehensive—consultation with the relevant parties, it has a number of shortcomings.

The government also obviously has had both eyes on the mirror while drafting it.

In other words, the Government has been more concerned about being seen to be doing something ... anything ... than worrying about getting the finer details right when it came to putting together this Bill.

So rather than reducing the uncertainty and ambiguity for those in industry who are trying to do the right thing when it comes to emissions, the document’s current form has the potential to increase doubt.

Still, even just having legislation on this issue before the parliament is an important first step towards real progress.

I was a member of the Standing Committee on Environment, Communications, Information Technology and the Arts recently charged with the examination of this Bill.

The resultant report accurately conveys that the state government departments, industry representatives, environmental and conservation organisations, and other groups and individuals who furnished submissions were supportive of the Bill’s intent.

However, each of these groups articulated significant and specific concerns as to its provisions and likely effect.

These concerns were highlighted during the Committee’s public hearing on September 3, 2007.

The inquiry heard that the Commonwealth Greenhouse Reporting Bill was put together without due consultation over July and August this year.

The Department even admitted it had not consulted with any of the stakeholders during the drafting of the Bill.

However, it did cite previous years’ discussions with various parties on the subject and referred to previous COAG outcomes and agreements during the hearing.

Although the Bill itself fails to reflect accurately the outcome of these discussions.

The Australian Industry Greenhouse Network, which represents the major Australian emitters, testified that the government did not consult with the network when drafting this Bill.

The state governments, likewise, were not consulted on the Bill.

Expert witnesses, state governments, industry and environmental groups agreed that while the objective of the legislation was sound and necessary to underpin emissions trading, the Bill before Parliament had various problems.

The inquiry heard that its introduction would deliver unintended consequences such as significantly raising compliance costs and producing a fractured system that may not include all major emitters and therefore might oblige companies to seek judicial review.

Other unintended results likely would include undermining state laws on climate change that are working; and cutting across other state laws that are not even connected to greenhouse emissions issues.

Major emitters testified that the Bill was not consistent with previous positions or agreements made between the states and the Howard Government at COAG.

It also was pointed out that the proposed Act would leave little room for future co-operative efforts or negotiation.

Overall, the major emitters supported the Bill in its current form but recommended numerous amendments to improve it.

Environmental groups testified that the reporting thresholds were too high and that more information should be publicly disclosed than currently proposed under the legislation.

The Investor Group on Climate Change and environmental groups believed the time-frame was too slow—which is consistent with Labor’s position of introducing emissions trading as soon as practicable.

The powers that the original Bill afforded the Commonwealth potentially could have undermined current and future state climate and pollution programs.

Legal testimony from Professor George Williams from the University of New South Wales’s Faculty of Law suggested simply removing the clause—clause 5—that provided these unnecessary powers.

If the clause—which he deemed to be “overbroad”—couldn’t be scrapped, he called for it to be amended to be specific rather than all-encompassing.

“It is hard to see how good policy could require the breadth of section 5,” Professor Williams says in his submission to the Committee.

“I am concerned that by denying an effective operation to state and territory laws providing for reporting and disclosure this will prevent those jurisdictions from enacting carbon trading or other schemes.

“Section 5 may strike at the heart of such schemes and prevent them (from) being put into place,” he goes on to say.

While backing the simplification and rationalisation of greenhouse reporting, the state governments recommended significant amendments both via submissions and at the hearing.

The submission from my home state of South Australia begins by stating that its government is—and I quote—“extremely supportive of the streamlining of greenhouse gas and energy reporting”.

However, like so many other groups, its view on clause 5 was unequivocal.

The SA submission says: “... the Commonwealth has taken a very heavy-handed approach that could have broad ramifications for an effective response to climate change. It undermines the spirit of the COAG initiative.”

That clause since has been amended by the government.

Of significant concern to both industry and the conservation groups which gave evidence was that the Bill leaves many of the practical measures that would underpin it to be determined at a later date by regulation and ministerial decree.

Indeed, the majority of submissions to the inquiry expressed concern that too much was left to regulation, believing instead that such provisions should be dealt with in the actual legislation to provide greater clarity and the chance of certainty.

There is concern that the Greenhouse Reporting Bill is necessary legislation but that it may yet have the potential to slow Australian action on climate change by undermining—at least in the short term—state initiatives.

All state governments represented at the hearing perceived the original clause 5 as unreasonable, leaving their responsibility to implement their own legislation, policy and locally based climate change programs to the discretion, essentially, of a Commonwealth government minister.

A significant number of submissions sought the deletion of the clause entirely; while Professor Williams, however, added that an alternative formulation of the clause would exclude state and territory laws only if and when they fell within the ambit of the regulations to be made under the Bill—that is, if they duplicate reporting made under the proposed scheme.

Labor members of the committee agreed with the committee’s recommendation that Clause 5 be redrafted to this effect.

Another major issue is that the thresholds for greenhouse and energy reporting are, in the view of Labor members and some other witnesses, loose in the Bill.

One submission noted that under the proposed threshold, only approximately 20% of the facilities which currently report under the National Pollutant Inventory would be required to report under the proposed Act.

Only 20% of those businesses who now report their emissions!

We are concerned, too, that it is proposed the maintenance and dissemination of information will, at the basic level of public disclosure, comprise a single aggregated total of emissions in carbon dioxide minus energy.

Meanwhile, only total energy produced and consumed will be made available for public disclosure.

It is the view of Labor members of the Committee that emissions and energy data should be disclosed at the facility level.

So it would seem the provisions of this Bill support disguise over disclosure.

Labor believes that state access to information must be guaranteed, not subject to the discretion of the Greenhouse and Energy Data Officer - as it would have been under the original Bill.

This issue is particularly relevant in light of the readiness of the states and territories to participate in a streamlined national scheme and the need for cooperation in greenhouse reporting between all jurisdictions.

Therefore, Labor supported the Committee’s second recommendation—that Subclauses 27(1) and 27(2) (c) be amended to provide for reporting information to be given to the state governments—and welcomes the amendment to this end.

Overall, this legislation must consider its impact—on all stakeholders—into the future.

In the absence of Federal Government leadership on climate change, state governments have led the way and their efforts should be supported rather than handicapped.

In concluding, I feel compelled to draw to the attention of Senators the fact that yet again, as has so often been the case in recent months if not years, Labor Senators have been obliged to come to the conclusion that submitting organisations were not allowed sufficient time to formulate and furnish their views on the proposed provisions.

In this present instance, all but three of the more than 30 submissions were received after the closing date.

Interested parties simply weren’t given enough time to give their views on the legislation.

Yet again, the Committee was not afforded sufficient time to adequately review the submissions nor to adequately inquire into the likely impact of the proposed measures.

Then, when amendments were put forward by the government in the face of overwhelming concerns by the majority of stakeholders, the House had less than 24 hours to review them.

This unseemly haste in dealing with a matter of significant complexity and acute importance only highlights the Government’s fixation on ramming through its Bills before they can be properly and comprehensively examined.

Surely this election-inspired haste, after eleven years of posturing, denial and delay, demonstrates how tenuous and self-serving this Government’s commitment to a workable solution to the climate change imperative really is.

We know members of the Howard-Costello government have either lost touch with Australian families—or never been in touch with them.

While many people across this great but fragile continent are concerned by, and willing to do anything they can to help curb climate change, they rightly have little faith in Canberra’s Coalition to lead the way.

And why would the Government be at the forefront on this issue when some of those that comprise it don’t even believe climate change is an issue, let alone a crisis?

Indeed, as we have heard repeatedly in this chamber and the house, a number on the Government’s benches still refuse to accept the science about the human impact on global warming and climate change.

In contrast to the Howard Government’s sceptics and fencesitters, Labor ranks are brimming with true believers.

We believe the issue of greenhouse gas emissions is a serious one.

We believe something needs to be done now to stem the harm being done to our planet.

We believe we have the policies and people to deliver on this and other issues which matter to the Australian people.

The sooner we act on emissions trading, the longer the economy will have to adjust to new market signals, and the better placed we’ll be to prosper in new and growing international carbon markets.

Therefore, because of its intent, Labor supports this Bill.

But as ever, we emphasise the importance of realising that intent through a well thought-out, consultative legislative framework, rather than a hastily drafted, lone-handed document.

Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

I table the revised explanatory memorandum for the National Greenhouse and Energy Reporting Bill 2007. To answer Senator Milne’s question in relation to the disclosure of information to the states and territories: this is not intended as a device to restrict information to the states and territories. The government take very seriously its responsibility to protect the very detailed data it is now requiring Australian companies to report. This will include data that could convey detailed information about the production activities of a company, the technology it uses, the processes it uses and the position of the company in relation to emissions generally. The government’s intention is to make all of this information, including commercial-in-conference information, available to the state and territory governments. That is the intention. But what we do intend is that it be protected sufficiently. And that is what this bill is about. The government does have a responsibility to ensure that adequate safeguards are in place prior to handing that information over to the states and territories. So I can assure Senator Milne that this is not a device to restrict information to the state and territory governments; it is to make sure it is provided but in a secure environment, bearing in mind that this could be quite sensitive information.

My remaining remarks are by way of summation of the debate and I seek leave to have them incorporated in Hansard.

Leave granted.

The document read as follows—

Question negatived.

Original question agreed to.

Bill read a second time.