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Monday, 9 December 2002
Page: 9934

Mr BILLSON (9:01 PM) —It is a pleasure to speak on the Renewable Energy (Electricity) Amendment Bill 2002 tonight. We have had the shadow minister for the environment and the shadow minister for resources talking about the bill, and between them they could not muster a criticism of it. It surprises me that this debate has been so extended by a discussion about things, important as they are, that are somewhat peripheral to the bill before the House.

This is a world-leading mechanism that we are debating tonight. There is some slight finetuning going on around definitions and some of the administrative arrangements, but what we are talking about is a world-leading reform that the Howard government has implemented. The reform was discussed with me when I was in the UK shortly after its introduction, and they were saying how substantially advanced and improved it was over what the United Kingdom was doing in this area. Since then, we have had interest in this mechanism from Belgium, Austria and several states in the United States, such as Texas and California. This is world-class stuff. It is a world-class innovation by the Howard government about how to use economic instruments, how to put incentives in place to bring about renewed investment and expanded generation capacity in the renewable energy sector. This is first-class legislation that is getting a slight tickle, a slight tidy up, with some clarification as a result of the more than one year's practical experience we have had with this measure. The opposition is sitting there somehow implying a criticism about this bill, when in fact the bill has overperformed. It has exceeded expectations, and thankfully the drafters and the policy developers within the Howard government and within the bureaucracy foreshadowed that capacity for overperformance and some capacity to bank RECs—the certificates that this measure generates—so they can be offset against other years within the 10-year period.

So this is a celebration. Everyone is on board. Everyone is supportive. But those opposite are trying to use this as an opportunity to have a bit of a spray about a review that represents input to the Howard government. They are also trying to pre-empt the review about this renewable energy mechanism itself that was called only a week ago. How clever is that? How clever are the Labor Party by trying to have a spray about the Parer review and then foreshadow what the review that is already in place—it was foreshadowed when the legislation was passed—is now implementing in accordance with those undertakings? Not very clever at all is the answer, because the Labor Party are all talk and no policy on this area.

As an example, we look at the Cunningham by-election, where some senior figures in the Labor Party were talking down the Kyoto protocol—they were pooh-poohing it. They were running around telling working men and women in the Cunningham electorate that the Kyoto protocol was bad news for their jobs and bad news for their community. But what also happened? There were others, such as the shadow minister, running around telling some of the Green interests within Cunningham: `The Labor Party are so on board. We're going to sign up to Kyoto. It's not going to do anything in the short term, but we're going to be on board. We're going to get on that train because we outsource our advice from overseas.' You have a protocol, a mechanism, that, if everybody fulfils their current obligations, will have a less than half of one per cent impact on the atmosphere.

Those people in the Labor Party seem to forget that this is not just about creating economic instruments for the sake of it. This measure is part of the Prime Minister's 1997 Safeguarding the Future package of measures, which were announced before the negotiations on the Kyoto protocol, that were going to demonstrate in practical terms how Australia would meet its Kyoto commitments. I am confident we are on track to meet our Kyoto commitments. What I am not confident about is whether the international community and the Labor Party have the wit to realise what signing up blindly to the Kyoto commitment embraces. If every party under the current Kyoto protocol for the 2008-12 accounting period fulfilled their obligation, we would get a net reduction in carbon dioxide in the atmosphere of less than half of one per cent. In technical terms, that is a poopteenth difference. That is if everybody fulfils their obligation under this protocol.

There is a consensus within the scientific community that you need around a 40 per cent reduction in the carbon dioxide emissions into the atmosphere to have any impact whatsoever on the climate. This is an eightyfold outcome over and above what is provided for in the first accounting period of the Kyoto protocol. What reckless individuals would look around to a nation whom they claim to represent—as the Labor Party claim to represent—and say: `Let's sign on to the Kyoto protocol. It's a cakewalk'? It might be well within our reach because of the action the Howard government has taken for the first accounting period, but that is not even a warm-up. The players have not even put their gear on. That is a less than half of one per cent change in the atmosphere when the scientists say that we need a 40 per cent reduction.

So the key to these early debates in the Kyoto protocol is to get the architecture right—to get the design, the instruments and the mechanisms right—because those thinking people who examine this issue with some care and clarity realise that the first accounting period is not even a warm-up. It is not even practice season. It is one-eightieth of the effort required to get the outcome needed to make a positive difference to our atmosphere and our climate. That is the effort that is before us. The government is right and proper to try to insist that the international community confront the simple fact that the first accounting period of the Kyoto protocol makes no difference to our climate—none whatsoever. Therefore, some would say, as the Labor Party does: `Don't take it too seriously. Just hop on that train wherever it might take you. Wherever it might take you, let's be on that train, because that's clubby and we've outsourced our policy advice to international NGOs.' I do not think that is appropriate.

In our circumstances, we know we have built an economic advantage on the basis of affordable and accessible energy. When the demands of the Kyoto protocol are ratchetted up to get somewhere towards the 80-times effort needed to make a difference in the atmosphere, we need to make sure with these changes that the rules are right, fair and equitable—and they are not at the moment. Why? Because half the world does not turn up. The developing countries, key trading competitors with our nation, have no obligation under the current framework—none whatsoever. They can take the intellectual property and the resources of developed countries and say, `Thank you very much; this is all very nice,' but they have no obligation to reduce their climate footprint. That is not right, that is not fair and it is certainly not appropriate if we are going to increase the effort under the protocol eightyfold in order to make a difference to the atmosphere.

There is another area of importance. Some people run around and get stuck into the Americans, saying: `The Americans are out of the system. Isn't that terrible? We'll push on regardless.' Are they blind, indifferent or ignorant to the fact that those people claiming to be well placed to generate carbon sinks and carbon credits need someone to sell them to? If you get all hairy chested and leave the Americans out, half the population who would buy those certificates are not on the radar screen—they are not playing. So it is in everybody's interests, especially those who claim to be well placed to take advantage of the Kyoto protocol, to make sure the Americans are in. For those who just want to see a better outcome for the atmosphere, like me—free of all the other shenanigans going on—we want the Americans in as well, because they are major emitters. Just as we need the developing countries in, everybody needs to play if we are going to make a difference to our atmosphere and achieve the eightyfold increase in performance that is needed over and above the Kyoto protocol.

The architecture matters. The engagement between Australia and the United States matters, because if we are not talking to the Americans then who is? They have some legitimate concerns, just as our nation has, with issues around carbon leakage and how we can continue to manufacture some of the best motor vehicles in the world. Labor are happy, under their vision for climate change, to have Korea and other developing countries bring their cars into our nation, free from worries about carbon emissions, when we have to worry about them. It is unfair, it costs jobs and it is why we need to be mindful about equalising those trade advantages.

How clever are the Europeans? With the dirty industries of East Germany shut down, the Germans receive huge windfall gains. They can say: `Gee whiz, aren't we clever? We've done nothing in particular to address climate change; we've just coincidently had a transformation in the economy through German reunification.' With that windfall gain, they can be up-beat and push their case. But let us not miss the point that a strategic advantage in anybody's eyes is an advantage to be exploited. That is why some of our global trading competitors like to put pressure on Australia and other countries to play it by their rules: they see an advantage and are trying to take advantage of it for their citizens' benefit. And why wouldn't they? But it does not make it good policy and it does not make it right for everybody. So the government is right to persist in seeking to ensure that the Kyoto protocol has the utility to cope with the task before it: an eightyfold escalation in performance to make a difference to the atmosphere.

The bill before the House today is a simple measure that tidies up a substantial step in the right direction. It is a renewable energy mechanism that takes about seven million carbon tonnes out of the atmosphere. That matters. It is a contribution. We have shown by the overall performance of this measure that it can be accommodated within our economy without a cost to employment. The review is on our doorstep. The minister has called for submissions by the end of next week to kick-start the review of the mechanism. I encourage all people with ideas about how to bump up the target—what should be in and what should be out—to get involved in that review to facilitate the further development of this first-class, world-class innovation in renewable energy technology and to provide a better greenhouse outcome for everybody.