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Wednesday, 3 June 2009
Page: 5388

Dr KELLY (Parliamentary Secretary for Defence Support and Parliamentary Secretary for Water) (9:44 AM) —It is with great pleasure that I rise to speak on the Carbon Pollution Reduction Scheme Bill 2009 and related bills and in opposition to the coalition amendment. If there was one issue that matched the intensity of the Work Choices debate in 2007 in my electorate, it was climate change. If there was one thing that I was sent into this place to do, with the words ringing in my ears, it was: ‘Do something about climate change.’ That message from my electorate was loud and clear. The depth of that feeling within my electorate was illustrated by the widespread acceptance of the agenda of the Clean Energy for Eternity movement. They have led the charge and they are leading the charge to demonstrate what a local community can do. Certainly it made very clear my mission in this place.

I am also closely involved with meeting the climate change challenge in my new role as Parliamentary Secretary for Water, where I am greatly privileged to be working with Minister Wong and my colleague Parliamentary Secretary Greg Combet. In fact, I suppose you could say that Greg is working on the CPRS and involved with consequence prevention while I am involved with consequence management in relation to the impacts of climate change on our most vital resource, water.

In relation to our water situation, the IPCC reported in 2007 that reduced precipitation and increased evaporation are likely to lead to water security problems in southern and eastern Australia. For example, annual stream flow in the Murray-Darling Basin is likely to fall to a bracket of 10 to 25 per cent by 2050 and somewhere between 16 and 48 per cent by 2100. Changes in the seasonality of rainfall are likely to further exacerbate annual stream flow. In five of the eight catchments in the southern Murray-Darling Basin the last 10 years have seen inflows around or worse than the CSIRO’s worst-case projections for 2030. The last three years represent the worst three-year period for the River Murray since records were first kept. Inflows to the Murray over the last three years represent just 54 per cent of the previous worst three-year period in more than 100 years of record keeping. Recently the Bureau of Meteorology indicated that rainfall deficiencies for the 21-month period from June 2007 to February 2009 have occurred against a backdrop of decade-long rainfall deficits and record high temperatures that have severely stressed water supplies in the east and south-west of the country. The combination of record heat and widespread drought during the past five to 10 years over large parts of southern and eastern Australia is without historical precedent and is at least partly a result of climate change. These are facts the hypocrites on the other side who talk of concern for the regions should think on.

This understanding of the water situation is one of the reasons why taking action on climate change is a key priority of Water for the Future, the Australian government’s strategy to secure the long-term water supply for all Australians. I have seen firsthand the consequences of climate change on rural and regional Australia, and it is so evident in Eden-Monaro, where almost the entire region has exceptional circumstances status. I have watched the growing concern of the community as the Snowy River has suffered, along with the continuing decline in the Snowy Hydro storage dams, particularly at Jindabyne and Eucumbene. I have talked with the farmers across the region as they struggle to adapt to these drier and hotter conditions, and I have sat down with councils struggling to ensure the survival of towns like Bombala and Nimmitabel, whose traditional water resources are dwindling. Our winter tourism industry in the high country knows that it will also be under threat, and we are all determined to keep the Snowy Mountains, not see them become the ‘sandy mountains’. My farmers know that the price of doing nothing on climate change will be annihilation. That is why they are starting to come together in groups like Monaro Farming Systems to work with the CSIRO on planning and adapting.

In stark contrast to the help farmers in the Murray-Darling Basin and beyond are getting from the Rudd government, the coalition made farmers pay the price of meeting Kyoto targets through reliance on land clearance restrictions without enabling them to at the same time obtain income from this. Under our scheme, farmers will be able, through reafforestation, to voluntarily generate emission units for increases in carbon sequestration from 1 July 2010, creating economic opportunities for them in trading these units.

The CPRS and the associated renewable energy target legislation soon to be introduced into this House will also drive a diversified regional economy, providing more employment options for our kids and a much-needed injection of investment. In Eden-Monaro we are seeing this already, with the huge Capital Wind Farm at Lake George providing jobs for people in and around Bungendore. This 63-turbine farm will generate 400 gigawatt hours per year and represents a $220 million investment, which surely even the member for Hume would also welcome. Also in my region we have seen the setting up of the Dyesol company, an exciting new solar technology; the Lloyd Energy solar thermal project, which promises to deliver schedulable electricity in Cooma and spin off into other industries in Moruya as well; the grandaddy of all renewable energy schemes, Snowy Hydro; the Eraring hydro scheme; the proposed Boco Rock 127-turbine wind farm at Nimmitabel; the planned solar farms in the Bega Valley; and the biogas pilot plant that we are seeking to set up also to deal with our methane emissions, which is generating huge baseload potential in Germany, the United States and New Zealand. Biogas plants will also be complemented by biomass generation from our timber industry, which is a large part of the economic success of our region, and certainly there is huge potential in that resource for further distributed energy generation. Wave energy at the Port of Eden is also being explored. And we are in negotiations with an exciting solar cell manufacturing company called Spark Solar. These are just some of the projects that will bring jobs and prosperity to regional Australia.

But business needs certainty, especially at this time, and moving ahead with the CPRS now will provide investors and business with the basis they need to plan, organise and manage the transition to a lower carbon economy and, yes, to take advantage of its opportunities. Hear what Nathan Fabian had to say on this issue. Nathan Fabian is the Chief Executive of the Investor Group on Climate Change, which speaks for some of Australia’s major institutional investors, including super funds, insurance companies and private sector fund managers, including AMP Capital and Colonial First State. It represents $500 billion in funds under management. In an interview on 28 May on Radio National he said:

Our members are concerned about delays in the emissions trading scheme, they are concerned about the trajectory of the change in the economy between now and 2020 and beyond. And their view is that we should be smoothing the transition as much as possible, smoothing what is a significant adjustment in the economy, to spread the impact on their investments.

Our members would rather get going with the scheme.

Single digit earning impacts are expected for most of the emissions intensive trade exposed companies. And those figures reduce when the current compensation scheme is taken into account. So they are not overly concerned about short to medium term.

Our investors expect companies to plan, to spread risks and to manage a transition over the long term. Our investors can see that climate change is a long-term investment risk that they must manage. They feel that they’ve got no choice. Some of our investors are super funds that have a 20 to 40 year horizon for their members. Superannuants like you and I and they, know that they must think about long term risks. Facing that reality, they want to start to manage the risks as soon as possible.

Fran Kelly asked:

So just finally then what’s your response to this delay we are seeing likely to occur now that the Coalition will delay the Bill?

He replied:

Yeah, well, that’s the concern, it’s curious to target for a high target in 2020 but a later start. Clearly that will lead to greater volatility in financial markets and we’ve just had a pretty serious experience of what that can be like to the economy.

The Rudd government, in contrast to the potentially disastrous coalition attitude, wants, through these bills, to take action now that will provide certainty in these challenging economic times. Placing a price on greenhouse gas emissions—carbon pollution—is key to ensuring that strong economic growth can be sustained while we reduce greenhouse gas emissions. The creation of a robust carbon market will provide information on the carbon price now and into the future. It will provide a powerful incentive for consumers and business to switch to lower-carbon products and production techniques, change investment patterns and encourage greater efforts in new and innovative areas of research and development. Using a market based approach to imposing this price will make it easier for business to plan for the future. Providing business with the tools to manage carbon risk will also ensure the policy response is sustainable over the decades ahead.

The government has listened to Australian households who have raised concerns that their individual efforts to reduce emissions will not be adequately taken into account under the CPRS. The government will take into account additional GreenPower purchases above 2009 levels in setting future scheme caps. A range of other indicators of voluntary action may also be taken into account. The minister will be required to report annually to parliament on reasons for her recommendations in relation to caps and gateways and as a matter of policy will set out how voluntary action has been taken into account. The more individuals contribute to carbon emission reduction, the more ambitious can be the caps set by the government. The government has committed to reinvest every cent it raises from the CPRS to build the low-pollution economy of the future and help Australian households and businesses adjust. Revenue raised by the sale of emissions permits will be used to help householders adjust to a carbon price. The Carbon Pollution Reduction Scheme Amendment (Household Assistance) Bill 2009 delivers a household assistance package that includes cash assistance, tax offsets and other measures to help low- and middle-income households adjust to a low-pollution future.

The introduction of an emissions trading scheme has been discussed in Australia for more than 10 years. The government has consulted extensively with industry, has considered over 1,000 submissions and has taken into account the outcomes of workshops with industry, technical and legal experts, a review of the legislation by the Solicitor-General and, I am proud to say, forums that I have conducted in my own electorate. There have been 10 years of talk about establishing an emissions trading scheme. It has been a long road to reach this point. Now is the time for action. The bills are here; the time is now. I say to the coalition: support these bills or forever stand condemned.