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Tuesday, 4 November 2003
Page: 21962

Mr STEPHEN SMITH (6:21 PM) —I support the package of the Ozone Protection and Synthetic Greenhouse Gas Legislation Amendment Bill 2003, the Ozone Protection (Licence Fees—Imports) Amendment Bill 2003 and the Ozone Protection (Licence Fees—Manufacture) Amendment Bill 2003. These measures are non-contentious but they do set the scene for debate and serious consideration of both ozone depletion and the greenhouse gas issue.

Our global society has now reached a scale where humans have the potential to impact adversely on planet earth at an environmental level. When you look at the scientific evidence which has been accumulated over the last few decades, it is clear that we have already actually done so. Humans are already responsible for the extinction or near extinction of many species and this occurred at a time when we were at a less technologically advanced stage of human development.

Given our current technology, our potential to impact is that much greater, whether that impact is adverse, remedial or even beneficial. Recently, the ozone layer which protects us from overexposure to ultraviolet radiation from the sun has been under threat from chemicals artificially created by humans. These halogen based chemicals were produced following the Industrial Revolution for a variety of purposes, from the dry-cleaning of clothes to extinguishing fire, and commercial and home refrigeration.

Chlorofluorocarbons were, and remain, valuable chemicals. They were, however, invented and originally manufactured at a time when there was little understanding of or thought given to the dire consequences they might have for the ozone layer far above us in the atmosphere. Their manufacture has saved lives, and as coolants they have facilitated the production of important pharmaceuticals and vaccines, let alone cooled beer. Today they can continue these functions, provided the gas cycle is closed and the operating facility is sealed to prevent gaseous escape and subsequent ozone layer damage. Alternatively, other chemicals have been and can be developed to provide a similar productive effect without the ozone-destroying outcome.

Both these approaches are obviously sensible, but no global benefit can or will be achieved if only one nation state ceases to produce a chlorofluorocarbon gas but others then make up the shortfall or produce more. To ensure the proper global control of these chemicals, the international community developed the now well-known Montreal protocol. It is the Beijing amendments to the protocol that these bills implement in domestic Australian law.

The worldwide ban on the release into the atmosphere of ozone-destroying chemicals has been a relatively simple matter achieved through an international agreement involving almost every country. It has come about without massive economic or industrial process dislocation and without any country or group of countries suffering significant or disproportionate detriment. Sufficient time was allowed for alternatives to the banned products to be developed and for development of the means to use the products in ways which would not adversely affect our environment. While there is still some limited international trade in the banned products, this will be reduced and probably eliminated over time as technological advances make these products irrelevant.

The remedial environmental effects of these measures is still to be fully captured or appreciated. This is especially so in Australia, situated as we are on the edge of the southern hole in the ozone layer. As a consequence, we feel the full psychological and physical impact of any reduction in our protective shield. Ultraviolet radiation from the sun is very damaging, and these days Australians are only too well aware of the potential fatal effects of solar-induced melanomas. The ozone repair work will take much longer yet, and these measures make a small contribution to that. The size of the hole oscillates every year as it is dependent upon many factors, and the chemicals that cause the damage can take up to 100 years to break down. The long-term projections now are that, as a result of the protocol and its amendments, few new additional compounds are being added, so we can expect the situation to gradually improve over time. It may, however, be 50 years before the ozone layer completely recovers.

The Montreal protocol could have served as a model for a global greenhouse gas abatement strategy. There are parallels between the greenhouse gas problem we now face and the ozone depletion problem that has been so effectively addressed. Both, for example, are problems caused in the atmosphere as a result of the release of industrial gases which accumulate over time and cause unintended adverse consequences. Both these consequences—the greenhouse effect and ozone depletion—can be ameliorated over time if the international community agrees to a strategy to reduce the release of these offending substances.

While the problem with the degradation of the ozone layer occurred relatively quickly and the solution was pretty readily apparent, the international legal framework still took some time to develop. Like the law of the sea treaty, the Montreal protocol outcome was all encompassing. Virtually all international players were in agreement—this was certainly the case at the most relevant or senior international levels. This provided the incentive for alternative chemicals to be developed to replace the chlorofluorocarbons and for new, environmentally safe industrial processes to be developed.

Regrettably, the same cannot be said at the moment for the major environmental global issue we now face: the greenhouse effect. The world community first tried to come to terms with the issue of global warming as a result of greenhouse gases like CO2 and methane at the Earth Summit in Rio de Janeiro in 1992. That meeting considered the groundbreaking first report of the Intergovernmental Panel on Climate Change—the IPCC—which was established by the United Nations and the World Meteorological Organisation in 1988 to tackle climate change and to put some science behind the debate. Several international negotiating meetings over the intervening years saw some progress made towards an agreement designed to limit the emission of greenhouse gases and safeguard the global environment.

The Kyoto treaty was agreed to in December 1997 by some 150 of the world's nearly 200 nations. Given the subject matter, it represented an unprecedented achievement on behalf of safeguarding the future global environment. Unfortunately, it now seems that that will be a largely symbolic achievement. Unlike the Montreal protocol or the law of the sea treaty, Kyoto set out objectives for greenhouse gas reductions for only some nations—for developed nations. It then failed to specify the rules under which these reductions would be achieved or measured. It also failed to establish sanctions for those who failed to act on their obligations. While almost every nation present at Kyoto agreed the problem was real, very few nation states perceived a clear and present danger either to themselves as nation states or to the globe generally which was sufficient to impose immediate measures which might cause social or economic hardship for their own peoples.

That was an especially attractive course, given it was clear that that hardship was not to be shared equally among all nations in the global community. For example, some nations were mystified by the members of the largest fossil fuel club, OPEC, being entirely exempt from any obligation under Kyoto while effectively charging others oligopoly prices for one of the products judged as being principally to blame for the problem. Others saw the exemption of China and India, the industrial powerhouses-to-be of the 21st century, as an extraordinary anomaly. These other nations were being called on to make economic sacrifices under the treaty which they saw would ultimately benefit China and India without any necessary or consequent global environmental benefit, given there was no requirement or incentive for China or India to change their conduct.

So while the enthusiasm and symbolism came easily at Kyoto, the hard detail remained to be resolved at subsequent meetings in Argentina, Bonn and The Hague. In seeking to resolve that detail, significant differences of attitude and approach have emerged between the developed world and the developing world, energy exporters and energy importers and, perhaps most significantly of all, the United States—and now Russia—and Europe.

More notably, from our own national interest point of view, Australia has lost a significant opportunity. The Howard government has sat idle during its time in office. On the one hand, it has offered a mantra of `don't sign, don't sign' to hold back a tide of global opinion in favour of a comprehensive international response to global warming and, on the other hand, it has offered a most feeble domestic policy agenda in the face of that inevitable day of reckoning. There is a global warming problem—we all know that. The world knows it. We acknowledged it at Rio and we confirmed it at Kyoto. Even the Howard government and the Bush administration have finally come to understand that planet earth has a collective problem that all of us in the international community need to address. However, instead of an array of sensible domestic policies which would have set us down a track consistent with our international good citizen obligations, the Howard government has neglected both the international and the domestic policy tracks and has, potentially, left our national economic interest out to dry along with the global environment.

Australia, especially under Labor, has always taken a leading role in international agreements. You only have to look to our historic role in trade negotiations through the Cairns Group and APEC, as well as the Canberra Commission with respect to the non-proliferation of nuclear weapons. While Australia, in absolute terms, only contributes a small percentage—two per cent—of the global total of greenhouse gases, our role is seen as significant internationally. This is because we are a First World country economically as well as an energy exporter, thus ensuring our high per capita greenhouse gas emission ranking.

Australia could and should have taken a constructive role in the Kyoto negotiations, highlighting our unique national position and our unique national interest position. Subsequently, as the position of the United States, the OPEC countries, India, China and, more recently, Russia have become clear and entrenched, new international initiatives over and above Kyoto are clearly needed. To ignore the message that the failure to successfully negotiate the detail of Kyoto has now sent, along with the inability of the global community to develop a framework which integrated all of the major players, is in the end as destructive of the environment as those who seek to deny that the greenhouse effect is the cause of climate change in the first place. Recent events in Moscow last month at the world climate change conference, where Russia effectively indicated its refusal to ratify Kyoto, suggest that the international opportunity to moderate climate change through the Kyoto treaty has been squandered.

Australia should still ratify the Kyoto agreement as it is in our national interest and it would see us acting as a good international citizen. But, short of the United States or Russia changing their minds on ratification, the treaty cannot come into effect. A new international effort must now begin afresh. Australia could and should take the lead in that. In the meantime the Howard government has lost over half a decade where we could have built a foundation of climate change research and domestic energy efficiency, let alone the fresh marketing of our traditional energy products. These products will remain important for decades to come, but they must now be adapted to the low CO2 context. Sequestration of Gorgon CO2 beneath Barrow Island is but one particular example of carbon capture.

A government with an eye to the future would not have wasted this period as the Howard government has done by seeking to simply mantra-chant that Kyoto should not be ratified. Rather, it should have worked with the community, international and domestic, with industry and with scientists to ensure that our national interest was served in a manner consistent with a better future for the international environment. Any Australian government with a clear view for the future would have understood the need for a serious investment in such things as the research and development issues related to zero emission coal or clean coal technology, increased energy efficiency for commercial and residential construction and transport, and the better utilisation of our massive natural gas reserves as a transition fuel for the 21st century.

Australia is in a unique situation with respect to greenhouse and it is worth taking a moment to understand just why that is the case. We are a nation surrounded by sea with a large landmass but with a small population. We have a First World developed economy and very significant reserves of energy, particularly in the form of coal and natural gas. Our petroleum and mineral resource exports account for over $40 billion each year. As a large-scale energy exporter, we are effectively unique among developed nations. As the visit of President Hu of China underlined recently, therein lies one of the keys to our future prosperity and a reason why as a nation we must take our obligation to address greenhouse very seriously indeed.

We are also the world's largest coal exporter, with coal still our major source of energy for domestic electricity. Even in isolation this makes a significant difference to us in policy terms from the vast bulk of other nation states. But we must also be aware of the way in which our international competitors in the energy export area may or will respond in their own national interests—for example, the countries that export LNG in competition with Australia include Indonesia, Malaysia, Brunei, Qatar, Saudi Arabia and Russia. None of these countries have ratified the Kyoto protocol, and it is not likely from their current dispositions that they ever will. Much of the developing world which is exempt from action under Kyoto competes with Australia in the international marketplace either as exporters of LNG or as exporters of coal. This places a real economic burden on Australia if we are to be the only exporting country that has this obligation. And this is where the greenhouse debate must be carefully measured from an Australian national interest point of view, because our national interest may not be the same as that of the EEC, OPEC or the United States.

In respect of our LNG, it is the case that our exported LNG more often than not displaces a much more polluting energy source in the importing country, so the net global environmental gain is clear. Our LNG, for example, may displace high CO2, high sulfur brown coal as an energy source in another nation. Instead of effectively sitting on its hands for the last half-dozen or so years since Kyoto, Australia could have developed a domestic and international plan to attack the obvious non-CO2 greenhouse gases. Methane and the chlorofluorocarbons—the ozone destroying chemicals that are the direct subject of these bills—are also very powerful greenhouse gases. They also present a much easier target. Methane is a major greenhouse gas which is 20 times worse, molecule for molecule, than CO2. A strategy to tackle methane would be a sensible parallel tracking policy while Australia and the world seek to develop more effective strategies to address the more difficult task we face with the much more diffuse CO2.

Through one mechanism or another, Australia must look for ways to reduce greenhouse gas emissions. Some look to international carbon trading schemes adapted to a domestic context or to a form of carbon tax, as has been touted in Europe. A form of the trading scheme concept has been used with success in the United States to control sulfur dioxide emissions, thereby limiting acid rain in the Great Lakes area. However, carbon trading will not be so easy to implement. Unlike sulfur dioxide, which tends to be highly concentrated at source, CO2 sources are very diverse. They are widely sourced throughout industry, transport and electricity generation and are difficult to license and police. About 33 per cent of CO2 emissions come from electricity generation, transportation accounts for a further third, direct industrial use accounts for about 20 per cent, and direct residential and commercial use accounts for another 12 per cent. This means that a CO2 tradeable permit system could potentially have to operate and be enforced within and between millions of users in order to be fully effective and comprehensive. A carbon tax is also another possible means of limiting emissions. Any tax on a commodity like this will certainly limit its use, as the simple indication by the Howard government of a future tax on LPG has already demonstrated.

There are responsible actions we can take not only as a First World developed economy with a large energy intensive export sector and significant mineral wealth but also as a nation with a real commitment to an environmentally sound and sustainable future. These natural blessings and policy objectives are not mutually exclusive. Firstly, we still need to better understand the science of global climate change, and this requires a global initiative which Australia can champion.

While the governments of the world may not be able to agree on a global treaty like Kyoto, there is no reason why we could not strike an agreement to form a global climate change science research institution at the international level. Australia would be well placed to take a leading role in such an initiative, given that we have many highly placed climate change scientists and meteorologists who are already highly regarded on an international scale. While the basic issue of global warming is fundamentally agreed upon, much of the science of climate change is not known. The more we know, the better we will be able to address the problem and the easier it will be to bring all countries and governments on board with the solutions. An international research effort coordinated at the UN level in the same way as the World Health Organisation would offer real science and real commitment by all governments, not just to symbolic documents but to tangible research outcomes which can be used to demonstrate to the world just what is and what is not at stake.

Australia could again be a respected nation in the context of greenhouse. It just takes vision and action—at home and within the international community. A domestic `tackle methane first' strategy would be an important first step. Sequestration and the associated research are another vital aspect of this work in Australia, where we have such vast reserves of coal and gas. The Gorgon project has made an important commitment to this end, and it should be encouraged generally. Our continuing competitive advantage of cheap energy from coal could to some extent be secured through research into the most effective ways of reducing the CO2 burden of coal. Of course coal is a high CO2 fuel, but again technology and research will reduce the CO2 output of coal-fired power stations and allow their continued operation at a competitive cost but with significantly less greenhouse gas output. Our massive gas reserves also represent a valuable and important transition fuel in a greenhouse challenged world. Gas is less carbon intensive, and the infrastructure to distribute it safely as a transport fuel is in place in much of Australia. As well, we should be funding direct research on an advanced gas passenger vehicle to allow the use of gas as a primary transport fuel, with significant advantages for our economy, given the import displacement effect.

Our domestic greenhouse effort must be based on a coherent and focused energy, economic and environmental policy which reflects the international context in which we find ourselves. It must also take into account the real and vital opportunities to address at an international level the need to marshal the research, science and economics of global climate change while we still can. Australia is well placed to take a lead in this at the international level and well placed to implement valuable change at home to protect our local and global environmental future.