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Wednesday, 28 October 2009
Page: 11205


Mr HUNT (11:37 AM) —I rise to address both the Carbon Pollution Reduction Scheme bills before the House and in particular the amendments put forward by the Leader of the Opposition and also the broader question of climate change. Let me begin with a very clear statement. This debate must be addressed from a position—as the Leader of the Opposition said—of hope, not despair; of giving people the opportunity to foresee a future, not to push them into a position of fear, not to push them into a position of paralysis, not to push them into a position where their economic life as well as their sense of social wellbeing is crushed as they look forward. We must look at this responsibly. We must look at this from a position of opportunity and hope and aspiration. We must give people a sense that their lives can be better, that we can deal with the problem and that it will not be a terminal condition for humanity.

So I want to address this in three simple phases: firstly, a clear statement, as I see it, of the problem; secondly, how the coalition responds to the issue of climate change; and, thirdly, the specific amendments which have been put forward by the Leader of the Opposition to reduce emissions in a more efficient way, to keep down prices within the electricity sector and to ensure that jobs are not lost along with emissions simply being exported to China, India and other countries so as to have no impact on the problem.

Let me then turn to the problem. The problem of climate change is a simple concept, although it is of course—and as it should be—disputed. There are 40 billion tonnes of CO2 or equivalent gases which are emitted globally on an annual basis. That means that Australia, with about 560 million tonnes of emissions, represents 1.4 per cent of total global emissions. The simple conclusion from that, as was stated this morning by the Leader of the Opposition, is that if we were to eradicate all emissions from Australia, if we were to close down Australia, we would still see that global emissions would continue to rise, that our 1.4 per cent would be replicated by Chinese expansion within a period of about eight months and that there would be no net impact of any significance unless there were comparable global actions.

I accept, and have accepted for 20 years—from the period when my university thesis was on precisely this topic of looking at the different options available, of regulation versus emissions trading versus carbon taxes, to deal with the question of climate change—that there is a real and profound issue of climate change. It has been part of the work of my life. I have never resiled from it, but nor am I who believes we should declare those two million Australians who take a different view to in some way be heretical. They have not just a right to present their view, albeit counter to my own. They have a duty, a responsibility, to do so—and a right to do so with freedom from being declared and denounced as heretics or being impressed upon as having failed a moral task. In a responsible society there is a duty to allow scientific debate and to let the weight and quality of that debate determine the outcome, rather than to denounce, deride and bring down those who would present a counter view. So I am of the view that the problem of climate change is real and significant and profound, but I am equally of the view that we must have robust scientific debate. People should never be criticised for taking a different view, and two million Australians should not to be pushed aside as if their views do not matter.

What then, as we look at the global problem, is the conclusion from this notion that there are 40 billion tonnes of CO2? The simple conclusion is this: that we must have a global agreement and that unilateral action will not just be ineffective but could in fact be counterproductive. How can it be counterproductive? By moving emissions and moving jobs to India, China and other unregulated economies where methods of production—whether of recycled paper or bauxite or different forms of metal processing—are not as well regulated, we could actually see a net increase in global emissions. Therefore, there must be a comprehensive global agreement.

The only thing that the planet knows is the total tonnes of CO2 emitted per annum which translates to the total parts per million of CO2 or equivalent gases. The IPCC has identified 450 million parts per million of CO2 or equivalent as a 50 per cent likelihood of a two-degree increase in global temperatures. At present we are at 387 parts per million of CO2. When you add in equivalent gases, that rises to about 460. When you take away the effect of aerosols, that drops to about 390. That is why we use the position of 387 to 390 parts per million of CO2. We know that a 20 per cent increase would take us to 450 parts per million and we are at present on track to reach that without global action. Therefore, as our first step we need global action in terms of a comprehensive global agreement. We have set down bipartisan support on targets. All that the planet knows is the total parts per million of CO2. So the debate about mechanisms is not about where we end up; it is simply about how we do that in a way which most effectively reduces emissions at the lowest cost whilst protecting Australian jobs and in particular protecting mums and dads, farmers, pensioners and small businesses from unnecessary price rises in electricity and similar goods.

Having said that, the second of the international elements that we need in order to deal the 20 per cent, or eight billion tonnes, of the 40 billion tonnes of CO2 or equivalent gases globally per annum is a global rainforest recovery program. In the next five years it is quite possible to reduce by half the eight billion tonnes to four billion tonnes of CO2 from deforestation in the Amazon and in Indonesia, in Papua New Guinea and in the Solomons, in Malaysia and in the Congo. It is quite possible, through the right mix of incentives, to save four billion tonnes per annum out of 40 billion tonnes, with enormous ecological benefits. That would be the single biggest, fastest thing the world can do over the next five years. The government has, sadly, dropped the ball on that issue, that approach, that task, that momentous responsibility, which was begun by my good friend Alexander Downer, by the now Leader of the Opposition, Malcolm Turnbull, and by John Howard, the then Prime Minister, whilst we were in government three years ago.

What we do know is this. That will then lead to domestic action as well. We have a role to play, but if our role is unilateral, it is of no effect and can, in fact, be counterproductive due to carbon leakage or the export of jobs and emissions to China and India, to which I have referred previously.

We have three pillars to our domestic approach. First, and most importantly, most urgently and most immediately, is the adoption of green carbon approaches and practices. What is green carbon, Mr Deputy Speaker Scott? As a man of the land, you would know that green carbon is about the use of nature’s own lungs—trees, mallee and mulga revegetation—and in particular the extraordinary opportunity to improve the carbon-carrying capacity of soils within Australia. It is not our view; this is the view of leading Australian scientists, whether you talk about David Lindenmeyer or the work of Professor Flannery. Only last week, the Wentworth Group of Concerned Scientists put out a report which said that Australia had the capacity to save, at the upper limit, 1,000 million tonnes of CO2 per annum through green carbon measures. Yet these measures have been almost exclusively left out of the government’s system.

The single thing which we could do on a fast rapid basis has been omitted from the government system in large part. That is not acceptable, it is not reasonable. It is not the work of people who are concerned about reducing emissions; it is the work of people who are focusing on an approach to attacking the industrial base of our society rather than reducing Australia’s net emissions. That approach to green carbon must be adopted in Australia. It is our first pillar. We have taken a very conservative view—15 per cent of that put forward by the Wentworth Group of Concerned Scientists or 150 million tonnes per annum . That is what we believe could be saved through adoption of green carbon measures in Australia, by providing incentives, support for our farms and our farmers, to improve soil quality, to improve the water retention and water efficiency of land and, in so doing, to improve the ability to naturally sequester CO2 within the carbon cycle of our land.

The second of our pillars, after green carbon, is the clean energy revolution. There are two elements to the clean energy revolution. The first is supply. We supported the 20 per cent renewable energy target. We drove the 20 per cent renewable energy target when the government wanted to hold it hostage to this legislation. What we saw instead was a government which was never serious about its own renewable energy legislation. It was a political tool, but we drove it, we threaded the needle and we managed to get it passed. That will lead to a very prospective way forward, so long as certain problems at present within the renewable energy credits market are dealt with. This is important stuff and we are proud to support the vision of solar, geothermal, tidal and wave, the great new energy sources of the future.

We must also have a movement which increases the adoption of combined cycle gas in Australia. If you want to look at the single biggest thing we could do over the next 10 years in Australia in order to reduce emissions, it would be to lift the level of combined cycle gas, which would provide a very useful source of baseload electricity, at a low cost, with great benefit to Queensland, also reducing our overall emissions profile on a grand scale.

On the demand side of electricity, we need a white certificate program. We need incentives to deal with some of the perverse barriers to adoption of lower energy consumption practices in the commercial, the domestic and the rental sectors. That would be an extremely important step forward. In good faith, we have put forward, through the Leader of the Opposition, amendments to that effect. We have not heard from the government. It is hard to understand why they have not adopted them. They form an important initiative which would reduce Australia’s total emissions in an energy efficient way and in a way which would help to usher in the clean energy revolution.

The third pillar is the most controversial—some form of carbon pricing. The fundamental flaw in that which is proposed in this legislation, the Carbon Pollution Reduction Scheme Bill 2009 and allied bills, is that it relies upon driving up the price of electricity as far and as fast as possible to bring about change. It relies upon behavioural change from driving up the price of an inelastic good, yet we know that the net effect will not be the same as that which is desired, proposed or intended. People will simply substitute out of other discretionary items whilst maintaining a reasonable level of electricity consumption. Electricity consumption in the domestic sphere—less so in the industrial sphere—is a very heavily inelastic good and people in essence will not drop or change their consumption behaviours enormously. Therefore, our amendments seek to deal with this fundamental flaw.

We have proposed six amendments and this brings me to what Malcolm Turnbull has dealt with. Firstly, most importantly in some respects, that there is a level playing field for our trade exposed sector, that we will not put our sector at disadvantage until 80 per cent of global sectors—whether it is in zinc, aluminium or bauxite, whether it is in paper recycling or comparable products—are brought within a global regime. It is sensible, it is prudent.

Secondly, as I have set out elsewhere, that agricultural offsets are included in the system from 2010, which would provide incentives and income for farmers. It is potentially a $3 billion a year income stream for Australia’s rural sector while improving our biodiversity and our emissions reduction. Why the government have not adopted this is beyond me. I think it is critical that they do that while omitting direct taxes on our farmers for belching cows.

The third thing is that we have to have a very clear transitional path which does not destroy the balance sheets of our power sector. I say that as a Victorian and as an Australian. We have put forward a proposal that deals with the fact that there is $50 billion worth of unallocated permits. It is revenue neutral and it is responsible. It is designed to ensure that Victoria and other states do not face power outages as the balance sheets of the power companies go belly up.

The fourth thing is the amendments in relation to small business. In relation to small business, the point is very simple: we want to ensure that there is a model which means that, instead of the power price being driven up by 30 to 40 per cent, we dramatically reduce that rise by ensuring that power companies are provided with incentives to have as lower emissions as possible but not having to carry the cost of a tax which is extraordinary. At present the government is proposing $120 billion. We would bring the total tax regime down over the next decade to close to $70 billion. That will keep power prices down whilst at the same time providing incentives for direct transition of the power sources.

The fifth area is to ensure that there is a direct incentive for using our waste coalmine gas. At present that gas will just go up into the air. We are providing a regulatory approach which would mean that we would clean up that gas. We use that gas from the rich gassy mines where it can be captured for electricity, and if we use that methane then we will reduce our CO2 profile. The proposal we have will maintain jobs in the coal export sector whilst at the same time dealing directly with the emissions which would not be dealt with directly by the government.

Finally, our sixth amendment is in the area of the voluntary sector. We are saying here that there must be energy efficiency and there must be support for the green energy sector. We have said simply that the voluntary actions taken by individuals in Australia should be on top of, not included within, our national targets. The government do not accept that principle. They are wrong to do so. It discourages voluntary action.

The last thing I want to do is deal with two myths within the government’s scheme. Firstly, the scheme is predicated on the view that electricity prices must be the highest possible. Because it is an inelastic good, that just means we will be imparting pain without reducing emissions. We want a scheme which has direct action—which directly reduces emissions. That is why our amendments are aimed at reducing emissions for agriculture through voluntary action and through what we would do with waste coalmine gas—real changes with real effect.

The second myth is that the timing of the legislation must be now, must be this day. Under our approach or under their approach the legislation would commence on the same day. That is a critical difference. The legislation would commence on the same day. They are not honest. They have not acknowledged that. If we finalise this after we know what the rest of the world is doing in Copenhagen, action will not be delayed one single day. The real system would commence on 1 July 2012 under our proposal or theirs, and the carbon tax for one year would commence on 1 July 2011. There would not be one day of delay under what we are proposing, but much greater protections for Australia, much greater direct incentives for action for our farmers and much greater direct incentives for action for the voluntary sector. That is why I commend the amendments put forward by the Leader of the Opposition. I thank him and the member for Groom for their work. We are offering real action for Australia but at lower cost in terms of electricity and at the same time preserving jobs.