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Thursday, 18 September 2008
Page: 7852

Mr RUDD (Prime Minister) (9:34 AM) —The legislation that is before the House today is an important part of the government’s long-term strategy to tackle climate change. The Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 provides the world’s first comprehensive regulatory framework for carbon dioxide capture and geological storage. It will establish the foundations for the development of a greenhouse gas storage industry in Australia and it forms an important part of Australia’s response to climate change. Climate change is one of the greatest challenges for the future for Australia, for our region and for both the industrialised and developing worlds. It is a challenge with enormous economic, national security, environmental and moral implications. How Australia responds to this challenge now will have a great impact on the future—our economy, our future prosperity, our environment and also our national security. The scientific evidence of climate change continues to accumulate.

The Intergovernmental Panel on Climate Change last year predicted rises of between 1.1 and 6.4 degrees over the next century relative to the period 1980 to 1999. As the government’s green paper on the Carbon Pollution Reduction Scheme noted in July:

Under a high emissions scenario, average temperatures across Australia are expected to rise by up to 5 degrees by 2070. The IPCC concluded that Australia’s water resources, coastal communities, natural ecosystems, energy security, health, agriculture and tourism would all be vulnerable to climate change impacts if global temperatures rise by 3 degrees or more.

The expert analysis points to severe global consequences and severe national consequences. These include rising sea levels, more extreme weather events, more frequent droughts, floods and water shortages, large-scale migration, increased threats to border security, the loss of infrastructure, civil unrest and regional conflict over increasingly scarce resources. Climate change will also have significant national security implications in our region, with many Pacific island nations exposed to severe and early impacts from rising sea levels.

Australia is more exposed to the impact of climate change than probably any other industrialised nation, particularly through its impact on our agriculture, water supplies, tourism industry and environment. The Intergovernmental Panel on Climate Change forecast last year that by 2020 significant loss of biodiversity will occur in some ecologically rich sites, including the Great Barrier Reef and the Queensland wet tropics. Climate modelling by the CSIRO and the Bureau of Meteorology suggests that rainfall in southern Australia could be reduced by up to 10 per cent by 2030 and by 20 per cent by 2050.

Acting now is the responsible thing to do, and that is what this bill is all about. We must prepare for a global transition to a low-carbon economy. To delay any longer, to stay in denial, as the climate change sceptics and some members opposite would have us do, is reckless and irresponsible. For our generation, for our kids and for future generations, we must act now. There is no alternative. The longer we take to act, the more Australia risks falling behind in the race to build the clean, green energy industries of the future, the industries that will drive a global economic transformation and create the high-paid, high-skilled jobs of the future.

The Australian government is determined to rise to the long-term challenge of climate change and the long-term challenge of threats to our water and our energy security. We have committed to the long-term target of reducing Australia’s carbon pollution by 60 per cent below 2000 levels by 2050. The government’s strategy to achieve that goal is based on three pillars that address immediate challenges while also preparing for the long-term future: (1) reducing Australia’s greenhouse emissions; (2) helping to shape a global solution; and (3) adapting to climate change that we cannot avoid.

On the first of those pillars, the best way to reduce carbon pollution while building long-term economic prosperity is through a Carbon Pollution Reduction Scheme. This forms part of the government’s overall approach to reducing greenhouse gas emissions. A further approach lies in what we will do on renewable energy. A third approach lies in what we will do to increase energy efficiency across Australia as well. Next year the government will introduce legislation to establish the Carbon Pollution Reduction Scheme for Australia. It will be the largest reform of the Australian economy in many decades. It is also the most important because, by helping to reshape the Australian economy, we can position ourselves to thrive in an increasingly carbon constrained world.

The government recognises that any restructuring of the economy will affect some sectors more than others. That is why we have made a number of key commitments to protect the most vulnerable in our community and to support the most affected. It is also why we propose to provide assistance to the most heavily emissions intensive, trade exposed activities in the economy. The government is consulting widely with the Australian community and with the business community on the design of this scheme.

The government is also committed to a range of policies and measures to complement the Carbon Pollution Reduction Scheme and help lower the costs in both the short and the long term, including energy efficiency measures, the support of clean coal, carbon capture and storage, as well as renewable energy technologies. Energy efficiency will not only lower the costs of production in carbon pollution; it will provide other benefits like improved energy security, innovation and productivity improvements, greater household comfort and lower costs of living. New low-emission technologies like renewable energy and carbon capture and storage will be critical in transforming our energy markets.

The legislation before the House today establishes the legislative framework to make carbon capture and storage activities possible in Commonwealth offshore waters and to provide a management system for ensuring that that storage is secure. This bill is therefore crucial to Australia’s overall response to the challenge of climate change. It will help make possible projects that will be supported by the government’s National Low Emissions Coal Fund. That fund will be supported by our half-billion-dollar commitment to the Renewable Energy Fund to support the development and commercialisation of advanced renewable energy technologies in Australia. We have also committed $150 million to the Energy Innovation Fund, a fund that will support the creation of an Australian solar institute to fund solar thermal and solar photovoltaic research and development.

Each of the programs established by this government aims to build links in what the Garnaut review describes as the innovation chain—the chain from early research to demonstration, and commercialisation to market uptake—to turn ideas into solutions. We recognise that addressing climate change will require a massive collaborative effort between our scientists, our research institutes, CSIRO flagships, the CO2 Cooperative Research Centre, private capital and energy businesses themselves. This collaboration will be particularly critical in developing clean coal technologies such as CCS.

The government believes that this legislation and these investments are important because Australia has the potential to be a world leader in CCS technology. If we succeed in demonstrating CCS technology, many other nations are likely to follow. The bill therefore contributes also to the second pillar of our long-term plan to tackle climate change: helping to shape a global solution on climate change ahead of the Copenhagen climate change summit in December 2009. Australia is continuing to work closely with the international community, including China, the European Union, Japan, Indonesia and the United States, to develop an agreement that is effective and equitable. In the meantime, Australia is also working closely with Indonesia and Papua New Guinea to address deforestation, reduce greenhouse gas emissions and provide sustainable economic development here in our own region.

Regardless of our efforts to reduce Australia’s emissions and to shape an international solution, some impacts of climate change are now unavoidable, given the level of carbon pollution already in our atmosphere. That is why the third pillar of our climate change strategy is so important: adapting to the climate change we cannot avoid. The government is already investing significantly in initiatives to help those parts of Australia most exposed to the impacts of climate change, including our farming communities and coastal regions, as well as the Great Barrier Reef. We have also agreed to a National Climate Change Adaptation Framework with state and territory governments, which includes providing $50 million in funding for a national climate change research facility. Together, these initiatives represent a comprehensive plan to tackle the challenge of climate change—not to avoid the challenge of climate change.

The government is investing $2.3 billion over five years in reducing greenhouse gas emissions and investing in innovative technologies. This includes the National Low Emissions Coal Fund, half a billion dollars over eight years; the Renewable Energy Fund, half a billion dollars over six years; the Energy Innovation Fund, $150 million over four years; the Green Car Innovation Fund, half a billion dollars; and the Clean Business Australia Fund, $240 million over four years.

Through COAL21, the coal industry will be contributing an additional $1 billion to our Clean Coal Initiative—and I thank the industry for that. Direct beneficiaries of funding provided under the National Low Emissions Coal Fund will include the research community, technology developers, operators of demonstration projects and developers of CO2 storage sites and associated infrastructure.

CCS technologies are important because coal is such an important part of Australia’s economy both for domestic energy generation and export revenues. Eighty per cent of Australia’s electricity comes from coal-fired power generation. While we build our renewable energy and gas capacity, coal will continue to provide most of Australia’s electricity for decades to come. That also means it will continue to be a major source of greenhouse gas emissions. Right now, more than 30 per cent of our total greenhouse gas emissions comes from the use of coal. That is why the development and deployment of low-emissions coal technologies are so important to achieving substantial reductions in Australia’s greenhouse gas emissions.

Meeting our greenhouse target will require substantial greenhouse gas reductions from the operation of Australia’s coal-fired power stations. CCS technology is also important for the long-term future of our coal exports. Coal is now Australia’s largest source of export earnings, earning an estimated $43 billion in 2008-09. If Australia can play a role in developing low-emissions coal technologies, we can secure the long-term future of the coal industry in a world that in coming decades must transition to low-carbon energy sources. Carbon capture and geological storage is a key component of the government’s strategy to reduce carbon pollution from the operation of Australian coal-fired power stations. Through the National Low Emissions Coal Fund, the government will support the demonstration of postcombustion capture at coal-fired power stations and also the carbon storage aspects of CCS.

The passage of this legislation is an important step forward in advancing the large-scale development of CCS and making sure that we in Australia are prepared for the future. This legislation will mean that the Australian government will offer exploration acreage for carbon storage sites as early as next year. At the same time, the national carbon storage mapping project will identify the nation’s most prospective areas and match them with demand locations. That way, we can prioritise the carbon storage exploration infrastructure task which lies ahead of us. This work will be carried out by a carbon storage task force led by Keith Spence and including representatives of industry, the labour and environmental movements and the research community—we are determined to get this right. The carbon storage task force will also work closely with the National Low Emissions Coal Council.

As I have mentioned, this legislation will help position Australia as a world leader on CCS. Internationally, carbon capture and storage is recognised as a critical technology in reducing the emissions of CO2 into the atmosphere from both power generation and other activities. The recent G8 meeting in Hokkaido endorsed seven particular recommendations made by the International Energy Agency and the Carbon Sequestration Leadership Forum, which focused on two areas: firstly, demonstrating CO2 capture through a commitment to 20 industrial-scale CCS projects by 2010 to allow the broader development of this technology by 2020; and, secondly, taking concerted international action to partner financially, support and share information to build the development of CCS.

CCS has the potential to be a major low-emissions technology. That is why we need legislation that can create the certainty to underpin investments in large-scale demonstration projects into the future. The legislation before the House will help Australia to develop technologies that have the potential to make a major contribution towards reducing greenhouse gas emissions in Australia and around the world. It is a critical element of creating an environment for investment in the low-carbon energy industries of the future. The Australian government believes we cannot continue with a do nothing approach—the do nothing approach which characterised the government which preceded us. Acting now is our responsibility. Acting for the long-term interest of the Australian economy is our responsibility. Acting now for the long-term interest of the planet is our responsibility.

The market for low-carbon energy technologies is growing rapidly and it will be worth hundreds of billions of dollars in the future. Australia has the choice to be a hub of clean-energy technologies and businesses or to simply become a follower, an importer of technologies developed elsewhere. We do not intend to do that. We intend to be on the front foot. That is what this legislation is about. And there is more to come. But we will only achieve the critical mass of research, innovation and investment in Australia if we begin to move to a low-carbon economy ourselves. That is why carbon capture and storage technologies, alongside the Carbon Pollution Reduction Scheme and the government’s comprehensive response to climate change, are so critical to Australia’s future.

Some in the community caution us against acting. Some say it is better that we just do nothing on climate change—that we just wait until other nations act, until other nations develop these technologies, until other nations show us the way forward. That is not the attitude of this Australian government. Some say we are only a small country so whatever we do does not really matter for the rest of the world. That is not the attitude of this Australian government. I believe those arguments that have been advanced are just wrong. They are unprincipled, they are short-sighted and they are absolutely reckless in relation to this nation’s economic future. They are also out of step with the best Australian traditions—the traditions of innovation, initiative and being among the first to raise our hand when the world is looking for leadership.

This bill is about Australia providing that leadership. It is about preparing for the future with the world’s first comprehensive regulatory framework for carbon capture and storage projects. It is about building a strong foundation for the future and seizing a potentially very large market opportunity for the future. The government believes that Australia should not be a follower on climate change; the government believes Australia should be a leader on climate change. That underpins the legislation before the House. I commend the bill to the House.