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Wednesday, 6 July 2011
Page: 4105

Senator XENOPHON (South Australia) (09:31): I am in continuation from last night on this issue. When I was speaking on this issue last night, there was real concern about the use of the word 'significant' in the bill in terms of a threshold. What does 'significant' mean? Does it mean 20 per cent, 30 per cent or 40 per cent, particularly in the context of water use? In other words, if a carbon farming measure is approved and the minister only has to consider if it has a significant adverse impact on water in a particular area where the Carbon Farming Initiative is planned, what impact will it have on food security, local ecosystems and the viability of adjoining farms in that area if there is an issue of interception? My concern is that the word 'significant' gives too much leeway and is simply too dangerous because, at the very least, it could lead to a number of unintended consequences when it comes to the whole issue of an appropriate threshold to consider before a Carbon Farming Initiative is approved.

Ultimately any project that will have any adverse impact on water availability or Australia's food security should not be approved. We have seen the difficulties with managed investment schemes. We have seen the damage that managed investment schemes have caused to agriculture and family farmers. We have seen the damage that managed investment schemes have caused to water availability by distorting the water market, which has prejudiced many small farmers throughout Australia, par­ticularly in the Murray-Darling Basin. That has been an issue of great complaint from irrigators in the Riverland in South Australia, which I represent.

I also think it is important that we recognise early adopters of emissions reduction schemes. Indeed, that is something the Prime Minister has previously said. I agree with her that, if you have been an early adopter, you should be credited for it. I have previously spoken about the importance of early adopters and recognising irrigators who have invested significantly in water infrastructure. Well, the same theory applies here. Farmers who have taken the initiative and invested heavily in projects to independently reduce emissions should be included within this scheme. Until July 2010 they were able to access the Greenhouse Friendly scheme, but since the government's announcement in 2008 that it would introduce the Carbon Farming Initiative, their ability to trade their credits has been severely impacted. While the two-year notice was beneficial on the one hand, it also meant that credits effectively lost their value and participants in the Greenhouse Friendly scheme were unable to sell their credits. This is something that ought to be explored in the committee stages of this legislation. There also needs to be consideration for early adopters under this scheme and I will be supporting the opposition's amendment to this effect.

As I mentioned earlier, I have a number of other amendments that I will move in the committee stage. In addition to the amendments I have already mentioned, I indicate now that I will be moving an amendment to require the administrator to publish on its website, within 14 days of providing its decision to the person who made the request, its reasons for supporting or refusing the proposed methodology. It is also important that one of the functions of the Domestic Offsets Integrity Committee is that it monitor all scientific research relevant to the issue of permanence and adjust permanence obligations under the act to reflect best evidence. If we are going to do this, let us rely on the evidence because, on the issue of permanence, there is a real concern amongst a number of farmers about the lack of certainty that causes. 'Permanence' is defined in the act as '100 years'. On the face of it, that gives a great deal of confidence. But it is not realistic in the context of farming practices and it is not realistic in getting a good outcome.

Let me quote from page 35 of the Senate committee report. The Chairman of the Carbon Farming and Trading Association, Michael Kiely, said:

No farmer would be silly enough to agree to 100 years for soil carbon or 100 years for anything. A finance lender would want to know seriously the impact on the value of the property of agreeing to such a thing. We did some research into the 100 years thing and discovered it was a policy decision, not a scientific measure ...

That is a real concern. We need to listen to key stakeholders such as the CFTA. It would be foolish not to listen to those who have that firsthand practical knowledge. This was a recommendation about the issue of permanence in the inquiry into these bills. It is important that the DOIC continue to update, amend and improve the scheme into the future. These are just some of the amend­ments I will be moving. I look forward to discussing them and debating them in more detail. I think we all agree, in this chamber, that a carbon-farming initiative is a good idea. I see agriculture as being part of the solution rather than being part of the problem when it comes to carbon but it is the detail and the implementation that will determine the effectiveness of such a scheme. If we get the detail or the implementation wrong this will be very bad news for Australian agriculture, and the monitoring and enforce­ment of the scheme will be vital.

This scheme has the potential to be useful in the steps towards reducing CO2 and towards tackling climate change. I urge those who are sceptical about climate change to take the precautionary principle and, as Rupert Murdoch once famously said, give the planet the benefit of the doubt. But if we are going to use measures, let us use measures that are effective. Let us use measures that are cost effective, sensible, practicable and which can be well implemented.

Without knowing the full details of the government's carbon plan—it is only a few days away; this Sunday the government will make an announcement in relation to this—it would be very difficult and indeed very foolish to proceed with this legislation. That is why I will be supporting what the opposition is proposing—that we wait for the regulations. I will be putting up an alternative proposal, which I hope will be circulated shortly, in the form of a second reading amendment, that at the very least as a fall-back position we wait until next Sunday. In other words, this can wait until the next sitting period because it would be too risky, too problematic and too fraught with difficulties for this piece of legislation to be dealt with and finalised before, at the very least, we know details of the govern­ment's carbon pricing plan. I support Senator Birmingham's second reading amendment that this bill be further considered only after a draft of the final regulations is tabled, but as an alternative—the fall-back position—we should not deal with this legislation this week until we know what the government is proposing.

Let us go back to what this bill is about. The explanatory memorandum of this bill says that this initiative has been designed to be complementary to a carbon pricing mechanism. We know that the Oxford English Dictionary defines 'complementary' as mutually complementing or completing each other's deficiencies. This bill will have a lot of deficiencies unless we get some more details about the carbon-pricing mechanism and the carbon-pricing details that the government will announce in just a few days time.

I want this carbon-farming initiative to be effective. I want it to work. I want it to be effective in reducing CO2. Agriculture has a key role to play but I am very concerned that the framework of this bill, because it is complementary, is predicated on what a carbon-pricing mechanism will do, and until we have the details of that carbon-pricing mechanism I urge my colleagues on both sides of the house to be cautious and sensible and wait until we get those details this Sunday. That is something that I strongly urge my colleagues to do; otherwise we could well be back here in a few months time trying to unravel legislation that needs to be changed by virtue of the government's announcement this Sunday.