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Wednesday, 28 October 2009
Page: 11333


Ms LIVERMORE (8:40 PM) —Here we go again. The last time the House debated the Carbon Pollution Reduction Scheme it had a somewhat surreal air because we knew then that, as heartfelt and well-reasoned as our contributions might be, the fate of the bills really lay in the hands of the Senate. We all know the outcome of that and the ultimate futility of that exercise thanks to the inability of the coalition to actually arrive at a position on the scheme.

Here we are again, each saying our piece in the chamber, all the while knowing that the debate that really counts at present is the one going on between the Minister for Climate Change and Water and the member for Groom on behalf of the coalition. It is encouraging to hear the feedback from both sides of the negotiating table that the discussions are proceeding in good faith and that both parties remain committed to finding a way to work through the outstanding issues.

The Labor Party’s approach to those negotiations is consistent with the approach we have taken to climate change all along. We just want to get the job done. We went to the last election promising to introduce an emissions trading scheme and we have an obligation to honour that promise. We have sought to honour that promise in a reasoned and consultative manner, giving business especially ample opportunity to be involved as we work through the design of the scheme. Along the way we have shown that we are prepared to be flexible when it comes to getting the design and timing of the scheme right. Earlier this year, when the impact of the global financial crisis on Australian companies became apparent, we announced a delay in the start of the scheme and a fixed price of $10 per tonne of CO2 for the first year, as well as increasing the assistance payable to emissions-intensive trade-exposed industries.

As I emphasised in my previous speech, we do not see the challenge of responding to climate change and designing a means to reduce our carbon emissions as a partisan political crusade. Rather, we recognise it simply as a problem that would be confronting any government who found itself leading Australia at this point in time. In fact, if the coalition had won the 2007 election, they would have been the ones implementing the promise they took to the Australian people during that election to introduce an emissions trading scheme by 2012. As it happens, it is this Labor government that has accepted that responsibility as part and parcel of governing Australia at this time.

When we started on this exercise, we quite reasonably regarded it as something that should enjoy bipartisan support. After all, it was John Howard who initiated the Task Group on Emissions Trading and the coalition who took a policy promising an emissions trading scheme to the last election after the current opposition leader prevailed inside the coalition cabinet. This used to be a problem that was recognised by both sides of the parliament, and, especially at the time that Malcolm Turnbull took over the leadership of the Liberal Party, we reasonably expected that it would be a problem that would be worked through in a spirit of agreement on the broad principles and negotiation on the details. If Malcolm Turnbull manages to restore his authority over his own party, perhaps we can return to that position. It is in that vein that we have said all along that we welcome amendments from the opposition, and we continue to work through their proposals.

Last time I had the opportunity to speak on the bills, I spoke at some length about the rationale for the Carbon Pollution Reduction Scheme. I answered the fundamental questions: why are we taking action to address climate change and why are we acting by way of a cap-and-trade emissions trading system? I referred then to the science that has informed decision makers around the world of the existence of climate change and to the current and predicted consequences of that rise in temperatures. I pointed to the general experience and acceptance of countries around the world—including 27 EU countries, the US, Canada, Japan, New Zealand and Korea—that an emissions trading scheme is the lowest cost way to make the change to a less emissions-intensive economy.

So I will not go through all of those matters again. Rather, I want to touch on a couple of specific points that came up during the recent visit to Rockhampton of the Minister for Climate Change and Water. One stop on her schedule was a roundtable meeting with representatives from the local media to give them the opportunity to get an understanding direct from the minister of what we were trying to do with the CPRS and why. It was obvious from the start that there was a feeling amongst the participants that doing nothing was an option. The focus in the discussion was very much on the potential costs that the CPRS represented, as if action on climate change would bring costs while opting out of such action would come at no cost. If only it were that easy. If there were a simple get-out-of-jail-free card on this issue, we would grab it, but there is not. Unfortunately, there is sufficient evidence available to the government from scientists and economists that says there will be a cost involved if we choose the business-as-usual option and allow the consequent temperature rises and associated weather events to stay on their present trajectory.

To pick just one example of that evidence, the CSIRO and Bureau of Meteorology report from 2007 titled Climate change in Australia contains modelling predicting increases in the frequency of heatwaves, the frequency and length of drought conditions, a higher proportion of intense tropical cyclones and a substantial increase in fire weather risk in south-east Australia. That all adds up to significant loss of infrastructure, disruption and dislocation of major industries and threats to the wellbeing of people in many parts of Australia. We could ignore that evidence, I suppose, as some in the debate ask us to do, but I do not think that would be discharging our responsibility as the government of this country. We would have to justify taking that risk on behalf of the people of Australia—both present and future generations—and I do not think we can. As the previous speaker said, in quoting Rupert Murdoch, ‘I think we have to give the earth the benefit of the doubt in this case.’

The people around the table at that meeting with the minister also had the view that we should wait until after the Copenhagen meeting before enacting the CPRS. I believe that this was a misconception of the nature of the CPRS and the aims of Copenhagen but an understandable one given the way that the opposition have tried to hide behind Copenhagen as a way of avoiding taking a position on the CPRS. There is nothing in the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills that makes their passage contingent on the Copenhagen outcomes. The international meeting in Copenhagen will be about setting targets and caps for emissions reductions. The CPRS is the framework under which those emissions targets will be met and it has been designed for Australia’s national circumstances. The CPRS has also been designed to be sufficiently flexible to accommodate the range of possible outcomes from Copenhagen. Important details such as the scheme caps will not be set until after Copenhagen. In the meantime, if agreement can be reached with the opposition and this legislation is passed through the Senate, businesses in Australia will have the certainty they need about the mechanism by which we will meet whatever targets are agreed at Copenhagen.

If the opposition thought that nothing could be agreed on emissions reductions in Australia until after Copenhagen, why did the opposition leader say on Lateline in July last year:

… the Howard Government’s policy last year was that we would establish an emissions trading system not later than 2012. It was not conditional on international action …

And why did the Liberals endorse the government’s emissions target to reduce emissions by at least five per cent compared to 2000 levels irrespective of commitments by other countries? The ‘wait until Copenhagen’ catchcry is a recent political formulation to buy the opposition and particularly its leader time to get its climate change policy in order.

One thing I did talk about in my previous speech that I will return to here is the coal industry. As I said back in June, it goes without saying that the government recognises the vital importance of the coal industry as our biggest exporter, a major employer and a driver of economic growth. That will not change any time soon, according to the latest Treasury modelling that shows the coal industry growing by at least 50 per cent by the year 2050. That has not stopped the Coal Association from spending up, telling people in my electorate that the CPRS will cost jobs in the coal industry. What they do not say in those ads is that the majority of coalmining in Australia is not emissions intensive. Half of all coal production in Australia will have a liability for their fugitive emissions of 80c or less per saleable tonne of coal. To put that in some perspective: coal is currently selling for upwards of $70 per tonne in export markets, and state government royalties that increased in Queensland last year are up around the $10 per tonne mark. There were no reports of the sky falling in on the coal industry when the increase in royalties took effect.

Having said that, we do take seriously the concerns for those gassy mines at the end of the spectrum where the carbon permit liability will be highest. That is why the CPRS includes a compensation package of $750 million. We want to work with those mines most affected to allocate that compensation in a way that helps them reduce their emissions where possible and otherwise ease their transition to the introduction of a carbon price. I detailed in my previous speech my experience of working with the minister and the management of Rockhampton’s QMAG plant as QMAG grappled with the potential impact of the CPRS on their operations, particularly their efforts to make changes to the activity definition. They were successful in achieving that. I had a similar experience when it came to finding a way in the renewable energy legislation to assist those companies in my electorate with interests in waste coal seam electricity generation. I mentioned those examples to show that the government worked with those industries. We are willing to work with the coal industry, and there is money on the table—there is three-quarters of a billion dollars on the table—to do that.

I can tell the House that there is not money for the government to put full-page ads in the newspapers and run television commercials in order to counteract the Coal Association’s scare campaign in mining communities. What there is, however, in the pages of those same newspapers is the real story about the future of the coal industry in Queensland. I spent really just a few minutes on my way out to question time this afternoon thinking off the top of my head of some examples in my electorate. I asked my staff to go through the newspapers and find some of those examples. As I said, I just rattled off a few on the way out the door to question time. Here is a snapshot of some of the things that are happening in Central Queensland. First of all, there is the Abbot Point Coal Terminal expansion. The North Queensland Bulk Ports Corporation have just put out their draft voluntary environmental assessment for that, dated October 2009. This is a major expansion of the Abbot Point Coal Terminal at Bowen. The introduction to this document says:

Coal terminal expansions have recently occurred or are being studied in the ports of Hay Point—

near Mackay—

Gladstone and Abbot Point. All of these expansions are required to meet the predicted future export needs of the Queensland coal mines.

Turning to the Rockhampton Morning Bulletin, an article on 30 September states:

Tony Maher, president of the CFMEU’s mining and energy division … pointed out that 74 mining, energy and minerals processing projects worth $80 billion were in advanced development.

‘These will create tens of thousands of jobs and the reality is that the biggest problem is skill shortages—not job losses.’

The Daily Mercury of 20 October had a banner headline which read ‘Gear for growth: mining boss’. The article states:

THE future of our mining jobs and the region’s business confidence are all but guaranteed, according to the managing director of Rio Tinto.

Again from the Daily Mercury, on 28 August 2009 we see the headline ‘Interest firms up as new growth shoots’. The article states:

MORE than $45.7 billion worth of projects are ear-marked for the Mackay, Whitsunday and Coalfields regions;

…            …            …

Representatives from four major projects spoke at the event including Waratah Coal vice-president of exploration David Campbell who discussed the China First project, a proposed rail link between the company’s mines and Abbott Point.

Returning to the Rockhampton Morning Bulletin, a report of 21 October states:

A BILLION-dollar coal export terminal at Port Alma could be operating by 2014 …

The project, proposed by Xstrata Coal, would serve the Wandoan Coal project, which has the potential to become Australia’s most productive coal mine.

…            …            …

When it was operational the terminal would provide 100 full-time jobs and could export up to 100 million tonnes of coal.

I also have a media release from the Hancock Alpha coal project, which is 500 kilometres west of Rockhampton. Nearby is the Galilee coal project at Alpha, which I mentioned in my speech in June. It is a coalmine worth $7.5 billion that will generate 6,000 jobs. In the announcement in the Rockhampton Morning Bulletin in May, the president of Waratah Coal said, ‘I don’t think the CPRS is going to have enough of an impact to present insurmountable problems.’

And, because my staff are incredibly efficient, they went beyond those newspaper articles and gave me a list from the Queensland Department of Mines and Energy of Central Queensland coal development projects, listing some 50 projects in the exploration or early development stages.

All of that tells me that there is a lot of faith out there in the future of the coal industry and a lot of companies are just getting on with it. Yes, there is work to do on getting the coal industry ready for the CPRS and understanding what it means mine by mine. So let’s get to work on that quickly so we can get back to the other issues that are going to cause headaches for the industry soon enough when all of this expansion and investment comes on stream—things like infrastructure, skills and building liveable mining communities.

Speakers on both sides have pointed to the need for effective international action to truly make a difference when it comes to mitigating climate change. That is very true, which is why I want to see the current negotiations between the Minister for Climate Change and Water and the spokesperson for the coalition succeed. I want the legislation to pass and I want Australia to go to Copenhagen with a position to drive an outcome that is good for our environment and our economy into the future.