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Wednesday, 10 February 2010
Page: 1059

Mr GRAY (Parliamentary Secretary for Western and Northern Australia) (6:55 PM) —I rise today to support the Carbon Pollution Reduction Scheme Bill 2010 and related bills. I found the contribution of the member opposite to be both informative and challenging. In his contribution, he made the observation that a lot has changed in the last few years in the context of the whole carbon pollution debate. And it is true—it has—and I have been surprised by the direction of a number of those changes.

Since the election of the current government in 2007 and the first presentation of the green paper, white paper and draft legislation, there have been many in the community who have said that progression of the Carbon Pollution Reduction Scheme would bring with it consequent destruction of Australian industry. Yet we have seen, at the time of the presentation of all of that argument, substantial new investment taking place in Australian industry across the nation.

The announcement in the third quarter last year of the Gorgon project taking its final investment decision was not just a significant decision for Western Australia but a significant decision in global terms, for two reasons. Firstly, it is a massive new LNG production facility, and the only one in the world to have been started in the year 2009. But, secondly, it is the world’s largest geosequestration project.

The geosequestration project that underpins the Gorgon project is not a requirement of the Australian government. It is not a requirement of the regulator. It is not a requirement of the government of Western Australia. The proposition to geosequester the CO2 from the Gorgon fields was a decision made by the project proponent—a decision made knowing that they would have to pay for the costs of that geosequestration. It was a decision made by the proponents of the project because they wanted to have a project that was environmentally better than the rest—that was capable, for the first time in the history of that industry, of geosequestering its massive CO2 emissions and doing that safely and in a commercially acceptable way.

In recent weeks in Queensland, BG Group in Queensland have announced the expenditure of over $3 billion in the acquisition of long-lead items for the LNG production facility that they wish to build at Gladstone. There were also announcements just yesterday of the first stages in the move to a final investment decision in two years time for the Browse Basin LNG facility—a $50 billion investment. A few months ago, the Shell company announced it was taking further steps with its Prelude LNG facility off the north coast of Western Australia. This is over $100 billion worth of new investment in hydrocarbons intensive industry that has not been scared away by the debate about carbon pollution, by the debate over an emissions trading scheme or by the difficulties that our parliament has had or Australian people have had in coming to terms with the complexities of this issue. I think that speaks volumes for the quality of our companies and for the quality of the public debate on this issue and, importantly, would lead me to conclude that, in fact, the implementation of a carbon pollution reduction scheme, as envisaged by the government, would not be a measure that would damage the Australian economy—in fact, would only enhance it.

Over the years, I have been a critic of the carbon pollution debate. Indeed, in 1990 I described climate change science as ‘pop science’. I regret that I said that. Climate change is real. The greenhouse measures proposed by the government are serious and they have serious implications. Greenhouse gas measures will affect how we create wealth, how we travel and how we work. At all times, our greenhouse gas measures must enhance our capacity to create wealth. It is wealth that allows us to protect our environment. Capping and reducing greenhouse gas emissions is one of the most significant challenges of the present time and we all have a responsibility to do something about reducing these emissions. This is not to say it will be an easy task; it will not be. Compromises will need to be made on the part of industry, households, business, families and government. All will need to adjust. There will be no area of our lives that will remain unchanged. It would be ignorant of us to think otherwise.

The Carbon Pollution Reduction Scheme Bill 2010 and related bills will be the most important bills we pass as a parliament. We are responding to concern from individuals, businesses and industry to address greenhouse emissions. I am contacted by constituents in my electorate continually. I will read one email that was recently sent to me. It said:

Climate change is the great moral challenge of our age.

That is the view of my constituent. I offer that view because it is a demonstration that the community do want action. Even industries that were initially sceptical of the Carbon Pollution Reduction Scheme have thrown their support behind the amendments.

Those opposite are playing politics with climate change when they break the longstanding, commonly held view, put firstly by Prime Minister Howard, that Australia could have an emissions trading scheme. The government and the opposition held a common view and a common response. We even had a deal. We had a deal; they reneged on it. Quite frankly, it is they who are not taking this debate seriously. The opposition do not take the need for a common view from all parliamentarians seriously. Opposition leader Tony Abbott is on the record as saying that climate change is ‘absolute crap’. He is on the record, or he has been verballed, as saying that he is ‘a bit of a weathervane’ on the issue. He needs to have courage and he needs to support the longstanding, bipartisan commitment to the introduction of a carbon pollution reduction scheme.

His climate change policy will cost taxpayers three times more than the government’s Carbon Pollution Reduction Scheme. Rather than decreasing emissions, it is said that they will ultimately increase by 13 per cent from 2000 levels and taxpayers will incur a $10 billion tax bill to pay for it. That means fewer roads, fewer schools, fewer hospitals, fewer water schemes and fewer measures that our parliament and our government can take to better look after our community and to prepare our community for such measures as may be necessary in a changing climate. He has a plan to spend $10 billion and, presumably, a plan to cut government spending on essential government services.

The government’s climate change policy will make polluters pay, while providing assistance for increases in electricity prices and ensuring that small businesses have access to grants under the $200 million Climate Change Action Fund. We will help them adjust. It will not be easy; it will be difficult. There is no magic solution and there is no magic pudding to compensate people for the pain that would be caused by these measures.

I have spoken before about industry support for an emissions trading scheme. It is an important point—10 companies in Australia, with a total market capitalisation of around $600 billion, support these measures. They realise the importance. They have factored in the carbon prices. Shareholders and stakeholders expect action. This is still the case. When I spoke before, I quoted an article in the Canberra Times. The article came after Prime Minister Howard announced, in March 2007, a task force to provide advice on developing an emissions trading scheme. It stated that Australia’s most important resource companies, including BHP Billiton, Rio Tinto, Woodside, AGL and Alcoa, had come out in support of a carbon pollution reduction scheme. It went on to say that, of the 200 submissions that had been posted on the task group’s website, the majority called for an emissions trading scheme.

It is clear that an effective, sustained global response to the threat of climate change is required, but in the near term it is recognised that linked emissions trading schemes—ETSs—are more likely than a single global system. I think that has been demonstrated by recent events in Copenhagen.

Today in this parliament I met Bernie Delaney from BHP Billiton and Mark O’Neill, both lobbyists for large resources companies—Gary for Rio and Bernie for BHP. I have no doubt that, given the strong position taken by the companies, they were in this building to lobby for an ETS. BHP Billiton supports the development of a global, market based mechanism for valuing and trading emissions entitlements and reductions on the basis that it is broadly based, efficient and phased in such a way that industry and the country have sufficient time to adjust. So they support the government’s position. On page 5 of their submission, BHP Billiton further stated:

Australia is vulnerable to climate change, as are many of the nations in this region. Acting alone, Australia can do little to mitigate the growth in global emissions.

Those are not my words; those are BHP Billiton’s words. BHP continue:

Australia can play a leadership role in encouraging an effective, efficient and equitable global scheme taking advantage of its resources and skill endowments and accepting its share of global efforts to mitigate greenhouse gas emissions.

That is what Australia did in Copenhagen earlier this year.

BHP Billiton have had a climate change policy since 2002, and they further revised it in 2007. Not only are companies such as BHP Billiton supporting moves to establish an ETS, they are actually committing to voluntary reductions of their emissions. In 1995, BHP Billiton took part in the Greenhouse Challenge Plus Programme which encouraged reductions in greenhouse gas emissions. Even earlier, in 1993, BHP started measuring greenhouse gas emissions, and they have publicly reported their resulting data since then. I note that it was in about 1993 that I made my ill-advised comments about climate change. At that stage BHP and many other members of the global corporate community were already acting on greenhouse measures and climate change.

BP are a global company with a market capitalisation of $232 billion. That is, it is a quarter of the size of the Australian economy. They have also 100,000 direct employees worldwide, and significant oil and gas production and refining capacity in the global marketplace. They operate significant assets in Australia and are significant joint venturers in the great North West Shelf project off the coast of Western Australia. BP states that ‘It seems more likely that there will be an ETS in the world marketplace, rather than starting from scratch.’

On their website, BP state their support for:

… precautionary action to limit greenhouse gas emissions and works to combat climate change in several ways, even though aspects of the science are still the subject of expert debate.

I am a Western Australian, and a great Western Australian icon is Wesfarmers Ltd. They are also supportive of an ETS. On page 1 of their submission to the previous government, Wesfarmers stated they:

… have no doubt about the desirability of actions aimed at reducing greenhouse gas emissions because of the likely adverse effects this build-up will have on life on earth.

Those are not my views; they are the views of Wesfarmers as put to the former government.

Wesfarmers are a major public company which began in 1914 as a farmers cooperative. It was listed on the ASX in 1984. Wesfarmers operate the chemical and fertiliser business, CSBP, in Kwinana, which is in my electorate, so I take a keen interest in their policies and activities. On the second page of their submission, Wesfarmers state:

While a trading system is more complex to design and administer than a straight out tax, and while it is subject to demand variations, the cap and trade schemes most often canvassed have a strong appeal in terms of certainty of achieving environmental objectives.

More recently, the chief executive of Woodside Petroleum—and I should declare that I was formerly an employee of Woodside Petroleum—Don Voelte, who had been a vocal critic of the Carbon Pollution Reduction Scheme, was quoted on ABC’s Lateline as saying that Woodside:

… could cope with the proposal in its current form.

Voelte added:

… compensation from the government would help with the industry transition required by the CPRS.

On 4 May 2009, in a statement from the Business Council of Australia, the president Greig Gailey expressed his support:

The BCA believes that global warming is a global problem and will only be solved with a global solution. The BCA fully supports the government’s initiatives aimed at forging an effective global compact that would see all of the world’s nations placing a comparable price on carbon emissions.

…            …            …

The BCA continues to advocate a well-designed market-based emissions trading scheme as the least-cost way for Australia to move to a low-pollution future.

In closing, I have risen to support this bill as someone who has worked in the hydrocarbon sector, as someone whose scepticism has been noted and as someone who has observed Australia’s largest publicly listed independent oil and gas exploration and production company change its mind too, to support the idea of an emissions trading scheme.

These decisions are not easy decisions for governments to make, they are not easy decisions for parliaments to take and they are not easy matters to debate. But they are essential, and they do require that we in this place work together rather than work against each other. They do require that we work in the interests of our country and not in the narrow interests of our political parties. I commend these bills to the House.