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Thursday, 3 November 2011
Page: 8153

Senator FAWCETT (South Australia) (13:12): I rise to address the Clean Energy Bill 2011 and related bills as a Liberal senator for South Australia, but also as somebody qualified in science from the University of New South Wales and someone who has spent the majority of his career working in a systems engineering environment evaluating risk and assessing complex systems. To do that work you need to understand the integrity of the processes and the data you are working with, and that is the approach I intend to take in looking at these bills and the carbon tax in particular.

There are two issues at stake with the bills before us: firstly, the carbon tax itself and whether the benefits it will bring to the environment outweigh the costs associated with it. To resolve that question, the second issue comes into play: how certain are we that the information we have been told thus far about the threat to the environment is true and accurate? How can we be certain that the threat will eventuate and, if it does, what are the consequences of the threat eventuating? Will this new tax provide an effective means to avoid or manage the threat or at least mitigate the consequences if it occurs? In the world of business and finance, questions like this are resolved in part by the process of due diligence, which is a form of constructive scepticism, not denial. It is a process to verify that all of the information you have been told thus far is true and accurate before you commit to a business transaction.

So how should we as legislators do due diligence on a change of this magnitude on our economy and our society? In a business transaction, teams dealing with marketing, forensic accounting and legal issues all have different roles to play. They communicate information relating to the same subject to different audiences, for different purposes and at different levels of detail. During due diligence, however, you would find very few successful venture capitalists who committed funds on the strength of an assessment of the facts by the vendor's marketing team alone. They would place far greater weight on their own forensic accountants and legal team. In the case of climate change, the truth-seeking role of forensic accountants is conducted by our scientists and we should give detailed consideration to what they are actually saying rather than just to the marketing team's executive summary. This is not to disrespect the marketing team. I recognise the genuine concern and passion of those on all sides of this debate who care about our nation and our world and who passionately advocate, people such as the Australian Youth Climate Coalition, who made time to meet with me in Adelaide. I am heartened when I see young people in particular prepared to look beyond themselves and to invest their time in causes for the common good.

But passion alone is not enough. As an experimental test pilot, I was not afraid to question a proposal no matter how passionately it was presented—in fact, generally I found the more passion, the more scrutiny was actually required. You have to critically ask: does the evidence or do the facts actually support what is put forward in the glossy brochure? Interestingly, most of the advocates that I have spoken to on this issue of climate change and the carbon tax have never actually read one of the IPCC reports—not even the synthesis report, let alone one of the underlying reports such as Physical Science Basis produced by Working Group 1. To come back to the business analogy, they have not done their own due diligence—they have not even read the business proposal, let alone the audited accounts—but appear to have made a decision based solely on the glossy marketing brochure. So can we trust that brochure? There has to be integrity in the process that has led to it. Certainly as a test pilot, before I would commit to flying a sortie, I would want to be assured of the integrity of design, of the disclosure information, of the data that actually determined the performance of the system under test or of the models that were used to predict that performance.

I have learned to place a great deal of trust in the engineers who support the design and the preparation for any test work and to work with them to understand the facts and uncertainties to evaluate the risk inherent in any activity. In the same vein, I applaud the dedication and integrity of the work of the vast majority of scientists in Australia and around the world who are contributing to the research and understanding of our world, our oceans, our land and our climate. They are not afraid to admit that they do not know everything and that we are always learning new and surprising things about our world and the way it adapts. Just last month ScienceDaily reported a new insight into global photosynthesis, the chemical process governing how ocean and land plants absorb and release carbon dioxide. What they have found is that the way that ocean and land plants absorb it actually occurs 25 per cent faster than previously thought. That fundamentally changes the assumptions that go into modelling about how our planetary systems respond to increased carbon dioxide. Do existing models take this into account? Obviously not, because this was only published last month.

People working at the coalface recognise that current models are far from perfect. In fact, even the co-chairs of IPCC working groups 1 and 2 last year proposed an expert meeting to develop better ways to refine and use the output from models. Drawing from their proposal, they state:

… not all of the new models will include interactive representations of biogeochemical cycles, chemistry, ice sheets, land use or interactive vegetation. This makes a simple model average increasingly difficult to defend and to interpret …

They go on to say that the new model should provide 'more robust and reliable projections of future climate, along with improved estimates of uncertainty'. What do they mean by uncertainty? A good example of an admission of the wide range of uncertainty that actually undermines the global climate models appears in Dr Tim Woollings' 2010 paper published by the Royal Society. He said

The spread between the projections of different models is particularly large over Europe, leading to a low signal-to-noise ratio. This is the first of two general reasons why European climate change must be considered especially uncertain. The other is the long list of physical processes which are very important for defining European climate in particular, but which are represented poorly in most, if not all, current climate models.

For those who like the thought of peer reviewed publications, remember that the Royal Society is a fellowship of the world's most eminent scientists and is the oldest scientific academy in continuous existence. It was established back in 1640. So how much uncertainty are we talking about? In 2009 Haerter published, in the journal of the American Geophysical Union, a paper dealing deal with aerosols, which are just one of these many inputs to global climate models. He said:

Due to these large parametric uncertainties, we apparently do not know the mean sulfate aerosol forcing component of Earth's top-of-the-atmosphere radiative budget to within anything better than ± 50%.

He went on to say:

In reality, therefore, we probably do not know the current atmosphere's aerosol radiative forcing to anything better than ± 100%, which does not engender confidence in our ability to simulate Earth's climate very far into the future with state-of-the-art climate models.

If I were to encounter error budgets of this magnitude in simulations for a prototype aircraft, I certainly would not be rushing to take it flying.

Models are not the only area of uncertainty. What should we do as legislators when the scientists do not agree? One good local example is the Great Barrier Reef. One school of thought has led to the common perception that emissions cause global warming, so raising temperature, which leads to coral bleaching and the reef dies. But experts in the field do not have a consensus on this. Professor Peter Ridd from James Cook University has recently highlighted, again, that as the sea warms coral in fact grows more vigorously. He is not alone in this. Back in 2004 the CSIRO detailed a report showing exactly the same thing, that rising sea temperatures in fact boost coral growth.

So if numbers of our eminent scientists are in fact willing to work with integrity and disclose the facts, the uncertainties and the gaps in our knowledge, why are we being presented with the story that the science is settled and the unscientific attitude of anyone who questions it makes them a 'denier'? Is it possibly because the heads of the marketing department know that if anyone felt compelled to do some due diligence they might expose flaws in the business case which would stop us buying into a costly venture such as this new tax and its associated impost on the Australian people and our economy? Surely not. According to the IPCC website, it is a scientific body and it 'embodies a unique opportunity to provide rigorous and balanced scientific information to decision makers'. They are sound ideals, but are they actually implemented and rigorously audited to check for a conflict of interest when appointments are made of people like editors and leaders who oversee the review process and the aggregation of data for consumption by the public and the policymakers? Would any scientist have such a conflict of interest? Recent media reports say that some do. One of the authors of the Berkeley Earth Surface Temper­ature—or BEST—study, which is billed as the ‘end of scepticism’ about climate change, actually threatened to quit after she said the project leader underplayed the fact there has been no global warming for the last 13 years. Professor Judith Curry was one of 10 experts attempting to compile definitive temperature data going back over 200 years. She claimed it had been tarnished by the project's director, who was overselling the results in favour of global warming. This director was Professor Richard Muller, who in a 2008 interview with Holly Richmond, who was with the green news organisation GRIST, was quite open about the fact that he did not mind people exaggerating if it furthered the cause. He said in respect of Al Gore:

If he reaches more people and convinces the world that global warming is real, even if he does it through exaggeration and distortion—which he does, but he's very effective at it—then let him fly any plane he wants.

Are there others like Professor Muller? Sadly, the answer is yes. They hold key positions in the IPCC. A recent publication on the IPCC written by a Canadian investigative journalist highlights the disturbing lack of governance within the organisation. This lack of integrity in the processing of that scientific information, some of which supports the case and some which does not, means we cannot trust the rolled-up summaries that we get. That expose goes on to look at a number of appointments of people who have been long-term activists in movements—some of them scientists, some of them not. One of the people recently appointed has been a long-term activist and director of the climate program for the World Resources Institute and the WWF's chief spokesperson on climate change, and has worked in the Climate Action Network but is not even a scientist. I am sure she has a very genuine interest, but her background is as a professional activist and her academic qualifications are a Bachelor of Arts from Indiana University in political science and Germanic studies—hardly one of the world's greatest scientific minds, yet the IPCC states that science is the basis of the information they have given to us as legislators.

Even a small amount of effort on due diligence shows that the process that leads to the glossy brochure, the rolled-up summaries that many people are making their decisions on, is not sound. Certainly recent events are showing that uncertainties exist. The climate change minister in 2009, Penny Wong, stated:

... this severe, extended drought is clearly linked with global warming.

Not only have we seen the floods, which history tells us are not uncommon for Australia, but the Climate Commission’s report tells us:

... it is difficult from observations alone to unequivocally identify anything that is distinctly unusual about the post-1950 pattern.

If the integrity of this process is suspect, what else lacks integrity? Certainly the politics—the reason for selling this product—lack integrity. Days prior to the last election, the Prime Minister announced to the Australian people that 'there will be no carbon tax under a government I lead'. For reasons of political expediency, she has been happy to allow that promise to become a lie in order to form a coalition with the Greens for the sole purpose of retaining power. The people of Australia should not forget that every member of the ALP who is now speaking in favour of this new tax also owns this lie.

There is also no integrity in the spin around the facts of global action—it is pure political sophistry. We are told that we will be left behind because China is taking action to close coal fired power stations. But there is no mention in these summaries, in this spin, of the new 500-megawatt plants coming online at a rate of at least one per week, according to a study conducted by the Massachusetts Institute of Technology. Even Australia's Ross Garnaut, in his third update paper, says that between 2005 and 2020 Chinese emissions will increase from approximately five billion tonnes of CO2 per annum to over 12 billion tonnes per annum. This growth of over seven billion tonnes a year compares with Australia's decline of approximately 70 million tonnes on 2005 levels by 2020. In short, our decrease in emissions is likely to be eclipsed by growth in one country alone that is 100 times or more greater than our cuts.

On balance, how do we evaluate the risk to our environment against the risk to our economy? Due diligence has shown us that neither the probability nor the consequence of the climate risk is certain. The scientists say so themselves. But what about the risk to our economy? Will the benefits eventuate? Much has been made of green jobs and the new economy, but despite Europe's extensive green jobs policies a surprisingly low number of jobs have been created—two-thirds came in the construction, fabrication and installation phase, one-quarter have been in administrative positions, marketing and project engineering, and just one out of 10 jobs has been created at the more permanent level of actual operation and maintenance of renewable sources of electricity. The study, done by the King Juan Carlos University in Spain, calculates that the programs creating those jobs also resulted in the destruction of nearly 110,500 jobs elsewhere in the economy—or 2.2 jobs destroyed for every one job created in the green economy.

What about business costs? In the real world, people doing due diligence on investments are now talking about sovereign risk in Australia. In the past Australia has been considered one of the safest places to invest. Nystar in Port Pirie has to make a decision in the next few years about a $400 million upgrade to their smelter—which provides employment for around 670 people—but they are now questioning whether they will go ahead with that upgrade. It is estimated this carbon tax will cost the company $10.2 million in the first year alone, and we are now seeing broad public discussion about whether this investment will go ahead and those jobs will continue into the future.

The defence industry in South Australia is part of our national defence capability. It is worth some $2 billion to the South Australian economy and generates many skills and jobs. Much has been made by this government of the need for the defence industry to be competitive in the global market if it is to remain sustainable. This carbon tax will reduce the competitiveness of our industry, which threatens its future viability and hence the employment of South Australians and, equally as importantly, elements of our national defence capability.

Will this tax be effective? At $23 per tonne, it falls well below Treasury forecasts of the level of value of carbon emissions that is going to drive behaviour towards renewables. Particularly when we go to an ETS, if it is then aligned with Europe, which has gone well below $23, it will be a lose-lose for the Australian people. The lower that value is, the less able the budget is to provide the supplements and support that have been so much vaunted by this government. If the ETS goes above the $23, people will lose out because those supports will not be there.

The Business Council of Australia says that, far from creating certainty, the tax is both ineffective and deeply uncertain. They agree with the scientists. The carbon tax is ineffective because it raises $105 billion of costs on Australian industry while simply sending investment, and therefore emissions, overseas. Even the Southern Cross Climate Coalition, a strong supporter of the carbon tax, has said that the carbon tax on its own will not be enough to cut emissions. So why impose the pain if even the most ardent supporters recognise that it will not achieve the desired outcome? This coalition also highlights that cost-of-living impacts for very low-income households will probably be higher than those modelled. In conclusion, the deliverables promised by the glossy brochure did not stack up so well in the business plan. In some cases they are not supported by the underlying facts, which shows that there is a flawed process and a lack of integrity. Having done my due diligence, I find that the scientists, as our forensic accountants, have done their job well. Some of the underlying data supports the business case, some does not, but in the summation and rolling up the executive summary through the IPCC, the process is compromised by the unchallenged appointment of long-term activists to key positions and the suppression of genuine debate. There is significant uncertainty surrounding the models used to forecast the level of threat and, indeed, the underlying assumptions are being challenged in current scientific research. The promised benefits and identified costs are not supported by more detailed analysis of the facts.

Why should we move jobs offshore to countries that will replace our manufacturing—and will do so with higher emissions—in response to a threat that still has significant uncertainty about both exposure and consequence? Why should we trust a government to fundamentally change our economy when they have lied just to retain power, have proven themselves unable to effectively implement even a simple policy such as home insulation without causing harm, and have allowed billions in waste in building school halls? South Australians—who are now seeing their jobs at risk because companies are hesitating to invest in Australia due to the sovereign risk represented by this government—should hold the Labor members for Adelaide, Hindmarsh, Kingston, Wakefield and Port Adelaide and every ALP senator to account at the next election for their part in the lie that there would be no carbon tax under a this government. As a legislator, I will not be committing our nation, our economy and our future to a flawed plan to address an uncertain threat.