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Monday, 26 November 2012
Page: 9759


Senator EGGLESTON (Western Australia) (17:59): The purpose of the Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012 is to provide for a link between the Australian carbon pricing mechanism and the European Union's emissions-trading scheme and facilitate convergence between the two carbon prices by withdrawing the planned 2015 carbon credit floor price of $15 and restricting use of Kyoto units. This is really, I must say, just another chapter in the ongoing fairytale of the Gillard ALP government saga on carbon pricing in Australia. According to UBS Investment Research in a report published in November 2011 in the Sydney Morning Herald, the European Union carbon-trading scheme has so far cost no less than $287 billion for almost zero impact when it comes to reducing carbon pollution. They are rather incredible figures, I think. The Friends of the Earth have said that the European Union emissions-trading scheme is a failure on environmental grounds—again, pretty severe criticism from one of the rolled gold environmental groups in the world.

So what benefit is there for Australia in being linked to the European emissions-trading scheme if it is not reducing carbon emissions, which is supposed to be the objective of an emissions-trading scheme and this whole exercise of taxing carbon? The whole idea of a carbon tax was to reduce carbon emissions. While it is plain that this is not happening in the world's biggest emissions-trading scheme—that is, the European Union emissions-trading scheme—nevertheless the Australian government has set a carbon price which in time will add to the price of almost everything in this country. The Australian carbon tax was scheduled to transition to an emissions-trading scheme in 2015, but with this legislation the transition to an emissions-trading scheme has seemingly been brought forward—no doubt, I have to say, at the instigation of the government's coalition partners, the Greens, who can read the writing on the wall, I am sure, and know that this compliant ALP government is unlikely to last very much longer.

My concern about emissions-trading schemes is that, while the concept sounds wonderful and progressive, in reality, instead of reducing carbon levels, emissions in one country are simply traded off against, say, a rainforest in Indonesia or the Amazon or some other carbon sink, and all of this is done with no net reduction in carbon emissions in the home country. For example, an aluminium plant in Australia could trade off its emissions by purchasing a rainforest in Indonesia and, having done that, the aluminium plant in Australia would have no obligation whatsoever to reduce its emissions, because it has traded them off for the rainforest in Indonesia. Frankly, I think that is very deceptive, and I think that the poor old Australian public are being led up the garden path into imagining that emissions-trading schemes are going to do wonderful things to carbon levels when in fact they are going to do nothing at all because, if you trade off your pollution for some other carbon sink in some other country, you do not have to reduce the pollution at home or carbon emissions at home; you just buy credits for having purchased a carbon sink elsewhere. It is a very dishonest concept, and I think the Australian people need to be made aware of that. All that happens is that money changes hands from the owner of the polluting industry to the owner of the rainforest or whatever, with no reduction in the level of pollution caused by the purchaser in their own country. In other words, as I have said, the whole emissions-trading concept is totally fraudulent, as it does not result in any reduction of carbon emissions. The European Union emissions-trading scheme is an example of just that: for all the money that has been spent on it, there has been no reduction in carbon emissions. Just remember that the money that has been spent is $287 billion in Europe, and all for no reduction in carbon emissions.

Of course, the same outcome could and should be expected from any Australian emissions-trading scheme. Furthermore, as has been said in this chamber many times, the Treasury modelling actually shows that the net outcome of the carbon tax and, in the longer term, the proposed emissions-trading scheme will be an increase, not a decrease, in carbon emissions in Australia. That Treasury modelling has been documented in this chamber many times. So what are we doing? Getting into this simply to increase, in the end, carbon emissions in Australia—which is a long way from reducing them, which is the story that is being promulgated to justify us joining the European emissions-trading scheme.

Then, of course, there are other problems associated with the international governance and the veracity of emissions-trading schemes. Firstly, there is the core matter of how the putative value of traded carbon credits will be confirmed. These credits will be worth millions of dollars, and as yet no international body has been set up with the role of, firstly, verifying the existing value of the traded commodity and, secondly, registering transactions as they occur. Verifying the traded commodity is a very important thing to do. One might ask, in the absence of any verification system, how many times, for example, will the same Indonesian rainforest be traded for emissions reduction? Without an international body supervising these transactions, the fact is that the same Indonesian rainforest could be traded very many times.

These are very serious questions when one understands that it is proposed that hundreds of millions of dollars will be exchanged in carbon trading. We are not talking about $1 million or $2 million. We are talking about hundreds of millions of dollars, and those sums will grow larger, year by year, as these schemes go on, if they do. So I think we in the Senate can be justified in asking: if there is no body to set up to verify the veracity of these carbon sinks that we are trading for, why on earth is Australia prematurely jumping into some sort of arrangement, with the biggest carbon trading scheme in the world, which, as I have said, is actually a total failure? There has been $587 billion spent on it for no reduction in carbon pollution in Europe.

One has to wonder why the time frame been brought forward. The original plan was to proceed to an emissions-trading scheme in 2015, but now for some reason there is what seems to be this rather indecent haste to link the Australian carbon tax to the European trading scheme. As I have said, I can see the fingerprints of the Greens all over this proposal, driven, as I am sure many of you might suspect, by their fear of the likely consequences of an election victory by the coalition in the forthcoming election. What I suspect the Greens want to do, along with the ALP, is get this in place before the election while they still have a combined majority in the Senate. The ALP and the Greens do have a majority, and they are very worried that if, after the election, the coalition is in office, none of this will occur. Although they, I think, quite sincerely believe in the value of these emissions-trading schemes and in carbon pollution itself as being dangerous, in the view of many of the people on this side of the House these things are just a fantasy.

Regrettably, the numbers in the Senate are such that this legislation will probably pass, and Australia will continue with this frolic down the pathway in fairyland for a little bit longer until the coalition become the government. Then we will have the responsibility of seeking to dismantle these arrangements. I know that there are those in the present government who understand the adverse impacts of an emissions-trading scheme on our economy and Australian industry in general and who do not need to be told that following this pathway will hurt Australian business and the Australian economy, will cost jobs and, according to Treasury's own modelling, will actually see an increase in carbon emissions. I just hope that people in this chamber might think about what I have said and perhaps consider not proceeding with this legislation. But, of course, the hard realities of politics are such that that is unlikely to occur. I have to say that this is a very sad day for Australia, because I think that today this very adverse legislation is going to be passed.