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Lateline -

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Tonight - another leadership change, Nathan Rees rolled by the right.

Let there be no doubt in the community's mind, no doubt that any challenger will be a puppet of
Eddie Obeid and Joe Tripodi.


and Joe Tripodi.

And NSW has its first female Premier.

Are you Joe Tripodi's puppet? U no.

This Program is Live Captioned.

Good evening, welcome to Lateline, I'm Leigh Lateline, I'm Leigh Sales. The newly elected
Opposition newly elected Opposition Leader Tony Abbott is committed to reducing carbon emissions
but says he'll do it bout says he'll do it bout an Emissions Trading Scheme, or a carbon tax. His
carbon tax. His predecessor Malcolm Turnbull has written a blog on his web site saying it's
basically impossible. What sort of change change climate change policy will the Opposition come
Opposition come up with, shortly we'll talk shortly we'll talk with Shadow Environment Minister
Greg Hunt. Is the coal industry going going to be a tough public relations sell to communities
where carbon will be stored.

No electricity is generated, they create carbon dioxide to show they can capture 95% of it. 200km
capture 95% of it. 200km north of of the Schwarze Pumpe, under this open field, Vattenfall wants to
bury its first deposit of carbon dioxide, this small community believes carbon dioxide underground
is more dangerous than in the atmosphere. The people at the protest meeting are scared of a repeat
of the 1986 carbon dioxide leak from Lake Nyos and Cameroon, killing 2,000 people Cameroon, killing
2,000 people and livestock within a 25km radius.

That special report from Germany by Emma Alberici, is coming up. First the headlines. A young
Australian man sentenced to 20 years jail for murder in Bulgaria. And for murder in Bulgaria.

Kristina Keneally rises to NSW Premier.

LEIGH SALES, PRESENTER: After a tumultuous week for the Liberal Party, now it's Labor's turn.

Tonight the New South Wales, Premier Nathan Rees, was rolled by his party and Kristina Keneally has
become the first female Premier of the state.

Nathan Rees says he was deposed by a treacherous right-wing Labor faction and that the new leader
will be a puppet.

John Stewart reports.

JOHN STEWART, REPORTER: Kristina Keneally emerged from tonight's Labor caucus meeting the first
female Premier of New South Wales.

KRISTINA KENEALLY, NSW PREMIER: I'm humbled by their trust in me. And I say that I'm here to work
for the people of New South Wales.

JOHN STEWART: Premier Keneally was born in America and has two sons. Before being elected to
Parliament in 2003 she was a full-time mother. Now she has the Labor Party to look after.

KRISTINA KENEALLY: Governments earn trust from the community. I intend to restore that trust.

JOHN STEWART: Those who had been plotting to get rid of Nathan Rees were now calling for peace.

FRANK SARTOR, NSW LABOR MP: I'm actually quite relieved and I'm looking forward to a really relaxed
and happy Christmas with my family. I'm actually quite relieved.

JOHN STEWART: Earlier today Nathan Rees said his 15-month leadership was undermined by a
treacherous right-wing Labor faction.

NATHAN REES, FORMER NSW PREMIER: Should I not be Premier by the end of this day, let there be no
doubt in the community's mind, no doubt, that any challenger will be a puppet of Eddie Obeid and
Joe Tripodi.

JOHN STEWART: Tonight Premier Keneally denied she will be controlled by right-wing powerbrokers and
distanced herself from Joe Tripodi.

KRISTINA KENEALLY: I can rule out that Joe Tripodi will be in Cabinet.

JOHN STEWART: 15 months ago Nathan Rees was plucked from obscurity to replace Morris Iemma, who'd
fallen foul of Labor factional powerbrokers. The one-time garbage collector promised to give the
top job everything he had.

NATHAN REES: I will be having a red hot go at fixing the problems in NSW.

JOHN STEWART: But the state's hospitals were in crisis, public transport occasionally shambolic and
the state's debt mounting.

On top of that, several of his ministers became immersed in scandals. And right-wing powerbrokers
constantly plotted when the Premier's poll numbers failed to improve.

Then two weeks ago at the state ALP conference, Nathan Rees moved against the plotters.

NATHAN REES: It was the single biggest day of my life, in professional terms.

JOHN STEWART: In a bold move, he axed ministers Ian Macdonald and Joe Tripodi.

JOE TRIPODI, NSW LABOR MP: I know for a fact that you all know that I have been nothing other than
loyal to Nathan Rees.

JOHN STEWART: It was meant to be a new start for the troubled Labor Government but the reshuffle
triggered his downfall.

NATHAN REES: Through the past 15 months my ability to do good has been impaired at every turn. A
malign and disloyal group well known to the New South Wales community has made the business of
Government almost impossible.

JOHN STEWART: The New South Wales Labor Party has become a problem for Kevin Rudd, weary that the
chronic instability will have an electoral impact at the federal level.

KEVIN RUDD, PRIME MINISTER: I would frankly say to all those folk in the New South Wales
Government: get your act together. Get your act together. The people of New South Wales expect good
government. It's time to end the games.

BARRY O'FARRELL, NSW OPPOSITION LEADER: The public's been locked out of the choice of the next
Premier of New South Wales. That's why if Nathan Rees wants to really fight for the public, go down
to Government House and ask the Governor for an election.

JOHN STEWART: Premier Keneally has a tough job ahead of her, with the next state election just over
15 months away.

Quentin Dempster discusses leadership spill.

LEIGH SALES, PRESENTER: To discuss the events in Sydney tonight I'm joined now by the presenter of
Stateline in New South Wales, Quentin Dempster.

Quentin, Kristina Keneally is the fourth Labor Premier in New South Wales in four years. For our
national audience, just give us some context: what exactly is she taking over?

QUENTIN DEMPSTER, REPORTER: Well, she's taking over the legacy that Nathan Rees nastily gave her
this morning. And one of the paper's tomorrow is going to depict her as the puppet, and that's what
she's taken over.

But the important thing for the national audience to understand is this is a reassertion of the
always dominant right faction. This experiment with the Lefties, Nathan Rees and Carmel Tebbutt,
trying to mimic Kevin Rudd and Julia Gillard - a federal, marketable scheme - hasn't worked in New
South Wales. So they've had to go back and say, "Look, we've got to start again."

So it's the ruthless application of the numbers. Those numbers you saw today, 47-21: that's a
straight Right/Left faction.

LEIGH SALES: So is there any hope then of building any unity, given the way that that's split?

QUENTIN DEMPSTER: With discipline coming back in through the Right asserting itself, there may be
that all the white-anteing stops. But Nathan Rees has set the tone of this and given this legacy to
Kristina Keneally, by saying she is the puppet of Joe Tripodi and Eddie Obeid.

So she's got to live that down. You've just seen her say - we saw her at her press conference say,
"Tripodi's not in the ministry." But she's got a big reshuffle to come up and everybody will read
those changes, those personnel changes, to see what influence the malign and treacherous forces
have on her.

LEIGH SALES: Nathan Rees did make some quite extraordinary accusations today about a discredited
odious regime of donations and patronage in New South Wales - the puppet line as you say. What are
going to be the ripple effects of that, if you like?

QUENTIN DEMPSTER: She had to tonight assert that she would follow Nathan Rees' slush fund
election-campaign reforms. Rees moved at the Labor conference, the conference endorsed it - no more
donations from property developers. Since Wollongong - the Wollongong property scandal - the
primary vote of the Labor Party has nosedived. Before Iemma and the split over electricity
privatisation, that went down. They had to staunch that very negative perception arising from
Wollongong scandal - that property corruption, the lobbyists, the developer donations went all the
way up to Macquarie Street. That was very dangerous to the Labor Party, quite apart from their
negative perceptions over service delivery which they've been suffering for some time now.

LEIGH SALES: We heard Kevin Rudd say quite bluntly there that he wants his colleagues in New South
Wales to get their act together. Are there any federal implications from what's going on in New
South Wales politics?

QUENTIN DEMPSTER: I think there's a different scale of things that the public will see about that.
They've got their complaints and their concerns. There may well be a change of government in New
South Wales on the 26th of March in 2011. The Libs can't believe their luck that there is this
instability in the Labor Party. That will play out.

But Kevin Rudd wants stability; wants it all to go away so he can concentrate on his major decision
of having a double dissolution to take on Tony Abbott. So he just wants it to go away.

LEIGH SALES: Quentin Dempster, you will have a very interesting program tomorrow. Thank you for
coming in a giving us a sneak preview tonight.

Turnbull accused Bishop of betrayal

LEIGH SALES, PRESENTER: In the federal arena that other leadership stoush is still an open wound,
with recriminations and personal attacks flying within the Liberal Party.

The ABC has obtained emails between Malcolm Turnbull and the Deputy Opposition Leader in which Mr
Turnbull accuses Julie Bishop of betraying him in the leadership ballot earlier this week.

Both have today publicly hosed down the rumours of acrimony, as the Prime Minister fired his first
salvo at the new Leader of the Opposition, Tony Abbott.

Emma Griffiths reports from Canberra.

EMMA GRIFFITHS, REPORTER: From a cosy chat with Labor disciple Bob Ellis.


EMMA GRIFFITHS: To taking counsel from a holy man.

TONY ABBOTT: I've had three days as an Opposition Leader.

DALAI LAMA: So you have to gain experience.

EMMA GRIFFITHS: And meeting Jewish community leaders. The new Opposition Leader is getting around.

So are leaked emails between his predecessor and his deputy. The correspondence was obtained by the
ABC and reveals a bitter failing out between Malcolm Turnbull and Julie Bishop in the hours after
he was dumped from the leadership.

In them Mr Turnbull accuses her of hypocrisy, saying he's unable to reconcile her public
declarations of loyalty to Tony Abbott, with "what you were saying to us last night in our
apartment ... your scathing attacks on him and his character".

JULIE BISHOP, DEPUTY OPPOSITION LEADER: We did laugh about Tony in his budgie smugglers but I'm
afraid that was a topic of conversation among all my colleagues that day.

EMMA GRIFFITHS: But the row centres on Ms Bishop's vote in the leadership spill. She insists she
backed Malcolm Turnbull but his doubt about her loyalty forced her to retrieve the ballot papers to
prove it.

JULIE BISHOP: The allegations and the false accusations were so intense that I felt that I had to
prove to everybody - not just to Malcolm - that I was loyal to the leader throughout the ballot

EMMA GRIFFITHS: She's outlived two Opposition leaders, and one Liberal MP has told ABC online that
she's now known as "the cockroach".

JULIE BISHOP: Well, I think a better analogy would be that a cockroach lurks in dark corners, hides
behind anonymous comments to the media and then doesn't have the courage to stand up and challenge
me in the party room.

MALCOLM TURNBULL, FORMER OPPOSITION LEADER: That's a ridiculous thing to say. I mean, it's an
appalling thing to say.

REPORTER: Do you think she's a cockroach?

TONY ABBOTT: Look, I think Julie has been a terrifically loyal deputy first to Brendan Nelson, then
to Malcolm Turnbull, and I know she'll be just as loyal to me.


EMMA GRIFFITHS: But it seems Tony Abbott will have to watch the newest member of his backbench,
who's still publicly disagreeing with him about the need for an emissions trading scheme.

MALCOLM TURNBULL: As a humble backbencher, from my position of obscurity on the backbench, I have
to say I believe we must take effective action on climate change.

EMMA GRIFFITHS: And in another dig at his new leader, Malcolm Turnbull says there's no way to take
that effective action without paying for it.

The Prime Minister agrees.

KEVIN RUDD, PRIME MINISTER: For the Liberals now to say that there is a magic pudding solution on
climate change - that somehow if you through a bit of fairy dust at it and say that, "bang," it all
happens without any adjustment challenges - I don't think that's being fair dinkum.

TONY ABBOTT: We all accept the need to protect and preserve the environment. We only have one
planet, but that doesn't mean whacking a great, big new tax on everyone.

EMMA GRIFFITHS: The new battlelines are drawn.

Greg Hunt discusses shadow climate policy

LEIGH SALES, PRESENTER: Joining us now in our Melbourne studio is the shadow environment minister,
Greg Hunt.

Good to have you with us.


LEIGH SALES: We'll turn to federal politics in a moment. But if I could just start with the news
out of New South Wales, that there's a new Premier there. Have you spoken to any of your New South
Wales Liberal colleagues tonight, and if so, what's the reaction?

GREG HUNT: I've actually spoke with a Senate colleague and the response was very simple. It is
corrupt, addled, a mountain of debt, and that's what they said is the endemic problem with the NSW
Labor Party.

And they also made the point that it's the same Labor Party which put Kevin Rudd in power, and if
you want to see the future of federal Labor, it's the same mountain of debt. That's mortgaging the
future and I think there is a very clear lesson for Australia. Project forward: a mountain of debt,
mortgaging the future and that's what you draw from New South Wales.

LEIGH SALES: OK, let's go back to the national scene. Are you hoping that you'll stay on as shadow
environment minister on Tony Abbott's frontbench?

GREG HUNT: I love my portfolio. I'd be happy to serve in any role - parliamentary secretary for
interstate rail gauge harmonisation. But I do enjoy the environment - I'm passionate about it; I
believe in the challenges of climate change - but these are matters for Tony.

LEIGH SALES: Given that you've advocated action on climate change for about 20 years, are you going
to be comfortable selling a climate change policy that doesn't include carbon trading or a carbon

GREG HUNT: The heart of what I have argued for for many years, including in a speech to the Centre
for Independent Studies, I think it was three years and three days ago, is direct action on climate
change. And that means whether it is looking at cleaning up the power stations, green carbon, which
is the work that we have looked at as a Coalition. And I pay tribute to Malcolm Turnbull, with
regards to fixing up our farms and sequestering carbon in our soil and trees. And thirdly energy
efficiency, they are all forms of direct action on climate change, which you can achieve without a
carbon tax; without an emissions trading scheme.

LEIGH SALES: OK, you mentioned your CIS speech, which I had a look at and I also looked at a speech
that you gave in Western Australia as recently as March this year. And I quote, "We proposed a
balanced and careful national carbon emissions trading scheme that supports direct action rather
than replaces it." So in March you wanted both those thinks.

GREG HUNT: Look, I've always believed in direct action.

LEIGH SALES: But you've apparently also believed in an emissions trading scheme at some point.

GREG HUNT: I'll go to the heart of that matter. What we have always said and what I have said is
that to do this in a way which is in discord with the rest of the world won't be effective, because
you will simply export emissions overseas. That's the fundamental problem here - that you have a
great big tax. $120 billion.

And I think Mr Rudd needs to be upfront about this - $1,100 per family per annum in Western Sydney,
in the eastern suburbs of Melbourne, in the outer areas of Adelaide or Brisbane. And that system
will simply export jobs and emissions if it's unilateral.

That's the problem here; that's why we're looking at direct action now, to do real things.

LEIGH SALES: But is that direct action going to be enough on its own to meet the carbon reduction
goals that Tony Abbott has said he's committed to?

GREG HUNT: We are committed to climate change action and earlier this year we set out a case that
we could save 150 million tonnes per annum of emissions, or CO2 or equivalent gases, in Australia
through green carbon. The New South Wales and Victorian governments put out a paper, which talked
about up to 1,000 million, or a billion, tonnes. The Queensland Government a similar figure. We
know Professor Garnaut was talking about 800 million tonnes of potential green carbon or fixing
carbon in our soils.

So of course this is possible. We want to pursue an incentives-based program rather than a punitive
program. That's what we can do now. We'll take real action immediately. That's quite exciting.

LEIGH SALES: But Malcolm Turnbull, as we heard in that story, has said today that it's not possible
to cut emissions without having a carbon tax or emissions trading scheme. I'll read you his quote:
"Whether carbon abatement measures are driven by an ETS, a tax, regulation or massive government
subsidies, they all have a cost and we will have to pay for it."

GREG HUNT: Well there's a distinction there, with great respect, as to what you've said. It is
quite possible to do this without a carbon tax or an emissions trading scheme - renewable energy
target. The Prime Minister made much of the fact that we led and they joined us in a renewable
energy target this year. That wasn't a carbon tax - that wasn't an emissions trading scheme.

There's nothing that's cost free. That's absolutely true - there's nothing that's cost free.
There's a better way than $120 billion, which to your listeners translates to $1,100 a year and
will simply push jobs and emissions to China.

The other thing, the critical thing here, is that if you take direct action with incentives in the
three big areas - green carbon, energy efficiency, clean energy - whether in the form of greater
use of gas in Australia or renewable - solar, geothermal, wave, tidal - these are real, not just a
great big cycle of money.

And it's important to note, out of $120 billion, Mr Rudd must say how much of that goes to
renewable or clean energy. Not one dollar goes to abatement. Most of it goes to big polluters.

LEIGH SALES: You won an award for your university thesis 20 years ago on precisely this topic: on
the merits of regulation versus emissions trading, versus carbon taxes to deal with climate change.
What did you conclude was the best approach?

GREG HUNT: The best approach is this: that for each particular problem you can use any of the above
tools. My view in many cases is that direct action is the case. If you have a global market, if you
have a genuine global market, then you could use some form of trading scheme. But unless you have
that genuine global market, then you have a real issue here with carbon leakage overseas, job
destruction in Australia, and the impact on grocery prices on electricity prices, on basic goods
for mums and dads and pensioners and farmers.

LEIGH SALES: To come up with the policy that you took to the last election, the Coalition had a
very high-powered taskforce which came up with a considered report. How is the Coalition going to
formulate its new policy?

GREG HUNT: Well, the key themes are already in place: green carbon or using ...

LEIGH SALES: What do you mean by green carbon? What are you talking about - carbon capture and

GREG HUNT: Green carbon is carbon capture and storage in our soils, in our trees, in our
revegetation ... The second thing is energy efficiency, and the third is the idea of clean energy,
and that also includes smart grids.

Now the other thing we'll be doing - having set down those themes for clear, direct immediate
action - is this: we'll work on the mechanisms over the course of the summer. And I think it's fair
and reasonable to ask for a little time on the mechanisms. But the themes for direct action are
clear and were part of Tony's first speech.

LEIGH SALES: OK. The taskforce I referred to, the Shergold taskforce, it included heads of the
department of Prime Minister and Cabinet, Environment, Resources, Foreign Affairs, Treasury, plus
top executives from BHP Billiton, Qantas, Xstrata and the National Australia Bank. Why do you think
that the policy you come up with will be superior to the policy that that group came up with that
you took to the last election?

GREG HUNT: It's very important to understand, with respect, that when you look around the world,
what are the real things which have actually reduced emissions to date, whether it's in China or in
particular in the United States or in Europe. Europe's had a very very thin trading scheme which
has basically been a disaster.

LEIGH SALES: Ok, sorry to cut you off. Mr Hunt, sorry to cut you off there. But I really do want
you to answer that question. Why is what you are going to come up to better than the high level
taskforce - what they came up with after months of investigation?

GREG HUNT: The key thing here is about timing, integration with the rest of the world. The problem
we have got here is we are going to act, not just before Copenhagen, but in a way which is
completely out of synchronisation with the United States. And if you are out of synchronisation
with the big developing markets, then what you see is that you'll have the migration of jobs and
emissions overseas and no change in global emissions, that is a consistent argument.

LEIGH SALES: But we are not talking about the timing of the policy. We're talking about the actual
content of the policy at this point, and why what you can come up with in a matter of a couple of
months or a couple of weeks is going to be superior to what you have come up with in the past after
lengthy consideration involving very high level and experienced people?

GREG HUNT: We have actually done considerable work. And it's not just us - if you look at the work
of McKinsey and Company. If you think of Australia as 600 million tonnes of CO2, McKinsey talks of
50 million tonnes of energy efficiency savings per annum by 2020. There's also 150 million tonnes
of savings through the work of our farmers, protection of our forests, regrowth of our forests, and
then the great task of cleaning up our power stations. And these are real things which the rest of
the world has largely been pursuing, which Australia has been pursuing, and that's why we have been

And now the question is this: while there is no trading scheme in the United States, and it will
cost $1,100 for mums and dads, Mr Rudd needs to say to Australians, "We'll be doing this alone".
Nothing's going to come out of Copenhagen which will be a sea change in real action, and he needs
to say, "Well, why will be doing this alone," and be upfront to pensioners and farmers about the

LEIGH SALES: Alright. The Shergold report that you based your policy on at the last election said
Australia should take action straightaway regardless of what the rest of the world was doing - to
create certainty for business and also create a positive investment environment. But also, let me
quote to you from that report, page 6: "The taskforce is firmly of the view that the most efficient
and effective way to manage risk of climate change is through market mechanisms. An Australian
emissions trading scheme would allow our nation to respond to future carbon constraints at least
cost. Other forms of the Government intervention would impose a far heavier burden on economic

So is the Coalition now going to ignore that advice that it commissioned before the last election?

GREG HUNT: Look - that informs how everybody goes forward. But let me be clear. There's a question
for Mr Rudd in this. Why would he support an expanded renewable energy target this year?

LEIGH SALES: Mr Hunt, I'm actually asking about your policy.

GREG HUNT: Sure and I will, but the Prime Minister today attacked the very thing which we jointly
put through the Parliament this year, which we led and they resisted for a while but which we
agreed upon, and he attacked that very approach.

So the answer is simple. There are a series of different options. But to act now at this moment in
history, where there's no comparable scheme around the world. My view, which I have argued in
writing for for many years, has been that you can have real and effective direct action; things
that people can understand. Who understands an emissions trading scheme, or the time it will take
to deal with it, let alone the cost, when you are the only ones going there?

LEIGH SALES: Alright. Based on Mr Abbott's remarks of the past couple of days, it's possible that
the Coalition may go to the next election advocating an open discussion on nuclear power,
individual work agreements and an anti-ETS position on climate change. Do you think those policies
are vote winners?

GREG HUNT: I think Australians want to see that we are not mortgaging the future. There's a big
mountain of debt. You referred to the New South Wales Labor Party: there's that same mountain of
debt which is piling up, and that's going to have an impact on families. So that will be extremely

In terms of nuclear energy, what we want to do is this: we want to deal with clean-energy sources.
we want to raise the question for the Prime Minister: why would you sell uranium overseas, although
not to a democracy in India, so they can reduce their emissions but then say it's immoral to even
raise the question in Australia?

So I think it's fair and reasonable to ask the Prime Minister: why is he willing to sell uranium
overseas, not to India, but say it's immoral to even ask the question?

On WorkChoices: WorkChoices is dead. A dead duck. No question about that. But individual contracts
have been in place in Australia for more than a decade, and so we see that individual contracts
have had a role. And what the Labor Party has done now is they have gone back more than a decade
and said that it's illegal for an employer to have an individual arrangement with an employee in
most circumstances, and that seems a little odd.

LEIGH SALES: Greg Hunt, we are out of time. Thank you very much for joining us tonight.

Germans object to carbon capture plans

LEIGH SALES, PRESENTER: The capture and storage of carbon dioxide is the great hope for the coal
industry and coal-fired power plants in their attempt to reduce emissions.

But it's new and relatively untested technology. The Australian Prime Minister Kevin Rudd has
created a carbon capture and storage institute to investigate.

In Germany, a demonstration plant opened in September last year with its opener claiming it was the
world's first display of carbon capture and storage.

The only hitch is that German law doesn't permit the storage of carbon dioxide underground and
scientists are still questioning whether the practice is even safe. Communities across Germany fear
the potential hazards involved in burying millions of tonnes of CO2 in their towns.

Europe correspondent Emma Alberici.

EMMA ALBERICI, EUROPE CORRESPONDENT: The winds of change are blowing across Germany. By 2020,
carbon-free energy sources like these turbines will be providing 30 per cent the country's
electricity needs. But even with Europe's most ambitious targets for renewable energy, powering at
least 70 per cent of the lights in these towns will still involve burning coal, the number-one
climate killer.

KATHERINA BLOEMER, VATTENFALL SCHWARZE PUMPE: So we will use coal a couple of years more, and the
world will not stop doing it. We need to have some solution to the carbon dioxide problem.

EMMA ALBERICI: At the Schwarze Pumpe coal-fired power station, it's a 10-million tonne a year
problem. Vattenfall, the Swedish energy giant that owns the plant, thinks it has a solution.

It's a whole new way of burning coal using pure oxygen, so it can't be retrofitted to old power
plants. No electricity is actually generated here. They create carbon dioxide simply to show that
they can capture 95 per cent of it.

KATHERINA BLOEMER: What happens behind the tanks is that the CO2 is compressed and cooled down
until it reaches a temperature of minus-20 degrees and the pressure of about 20 bars; that's when
it actually is liquid.

EMMA ALBERICI: Sir David King was the UK's chief scientist when the Government commissioned
Nicholas Stern to write his review on the economics of climate change.

Three years later, he thinks CCS is too expensive and will take too long to prove at a full-scale
power plant.

SIR DAVID KING, FORMER BRITISH CHIEF SCIENTIST: I don't think the technological solutions lie
around managing carbon dioxide put into the air after burning fossil fuels. It's alternatives to
fossil fuels that will provide the solutions.

EMMA ALBERICI: 200 kilometres north of the Schwarze Pumpe, Vattenfall wants to bury its first
deposit of carbon dioxide. This small community believes CO2 underground is even more dangerous
than it is in the atmosphere.

ROLF IGNAZ, RESIDENT: We'll be living above a liquid CO2 bomb. No one is telling us what is going

out, in a short space of time, 50 years or so, the whole thing will be empty; it's not worth taking
that risk.

EMMA ALBERICI: The people at this protest meeting are scared of a repeat of the 1986 CO2 leak from
Lake Nyos in Cameroon that killed 2,000 people and all livestock within a 25-kilometre radius.

Dr Rolf Kreibich is one of Germany's leading voices in the scientific debate around CO2 storage.

What happens when CO2 is buried 1,500 metres or more into the ground; what does the science say
about that?

DR ROLF KREIBICH: What we know about gas stored 1,500 to 3,000 metres in the ground, pressed tight
in a saline aquifer, is that it must be monitored. But it's difficult because gas goes up and down
but it also spreads across a large area sideways. And the scientific studies show you it's not
possible to adequately monitor the behaviour of CO2 underground.

EMMA ALBERICI: Local vet Ulf Stumpe is leading the fight against Vattenfall's CO2 storage plans.
His scientific training taught him about the devastating consequences of water contamination.

ULF STAMPE, VETERINARIAN: The knowledge about storage is so small that nobody likes to talk about
it. And it's so complicated nobody likes to talk about it, because that's, the storage is the
problem - a big problem.

EMMA ALBERICI: Vattenfall is adamant that the storage of carbon dioxide is safe.

KATHARINA BLOEMER: Of course if you are looking for a storage site you see that the storage site is
sealed from all sides so there can be no leakages, and the drilling holes that you cause yourself
you obviously fill up with whatever you need afterwards so that the CO2 doesn't leak out.

EMMA ALBERICI: So you are saying the CO2 can't leak out from the storage facilities that you are

KATHARINA BLOEMER: It can't really, because then again the storage facilities are not in regions
where earthquakes or things like that occur, that might shift the formation in which it stores.

EMMA ALBERICI: There's a delegation of engineers from Poland visiting the facility today at
Schwarze Pumpe. They want to know how it works. But there's one big hitch: German law won't allow
the company to pump its CO2 underground.

KATHARINA BLOEMER: At the moment we have no storage site: there's no legal framework for CO2
storage at the moment in Germany. What happens is unfortunately we have to ventilate it into the
air again.

EMMA ALBERICI: So this is really a carbon capture and pollution facility?

KATHARINA BLOEMER: That's a very mean way of putting it. Of course it's not nice and it's not the
way we planned it or want it to be - that's the fact. We are here concentrating on the capturing

SIR DAVID KING: The energy required to capture and pump it back into the ground is about 45 per
cent of the output of the coal fired-power station, so you are immediately adding that to the price
of the energy that goes onto the grid.

EMMA ALBERICI: So what do you think about the fact that at Schwarze Pumpe there's no storage

SIR DAVID KING: I think it's stunning, because it's not a full demonstration of carbon, capture and
storage. The real test is the storage. We don't know enough about the capacity for underground
saline aquifers to store carbon dioxide.

EMMA ALBERICI: The European Union has committed to funding 12 carbon capture and storage plants
across the region. Green groups say that's more a reflection of the EU's obsession with building
new coal-fired power stations and has nothing to do with any real commitment to climate change.

Sydney man jailed for murder in Bulgaria

Sydneysider Jock Palfreeman, 23, has been found guilty of murder in Bulgaria and faces 20 years in
jail, but his parents says key evidence was ignored and an appeal will be launched.


LEIGH SALES, PRESENTER: In Bulgaria, the family of a 23-year-old man found guilty of murder plans
to appeal against the verdict.

Jock Palfreeman was sentenced to 20 years' jail for killing a man with a knife during a fight. In
an interview recorded just hours ago his father told Lateline he was stunned by the conviction. His
parents maintain that crucial evidence was ignored in the judicial process,

Europe correspondent Philip Williams reports from the Bulgarian capital Sofia.

PHILIP WILLIAMS, EUROPE CORRESPONDENT: This was the moment the family feared as Jock Palfreeman was
led into the courtroom. With his father Simon at his side, the 23-year-old Sydney man stood calmly
as the Bulgarian judge handed down the sentence.

As he was bundled away to prison his family were left shocked and angry with what they say is a
seriously flawed process of investigation and prosecution.

DR SIMON PALFREEMAN, FATHER: When it sank in, I think the initial reaction was I was just stunned.
I was not prepared for that. I think the next thing was absolute outrage that they could just so
completely dismiss all the evidence that we had presented. And of course, it was made worse by the
fact that there was no reasoning behind it.

PHILIP WILLIAMS: It all went horribly wrong in Sofia two years ago. Jock Palfreeman says he only
used the knife as self-defence when a mob of drunken youths attacked him after he tried to stop
them beating two gypsies.

JOCK PALFREEMAN, DEFENDANT: I didn't want to hurt anybody, and these guys just still wanted to hurt
somebody for no reason. They still wanted to basically kill someone for nothing.

PHILIP WILLIAMS: But the court believed the Bulgarians in that group who claimed there were no
gypsies and Jock Palfreeman attacked them without provocation, killing one man, Andrei Monov, and
injuring another.

Simon Palfreeman says his son should be treated as a hero for trying to help rather than facing 20
years in jail.

DR SIMON PALFREEMAN: What is sustaining me at the moment is the fact that I have a young son
unfairly in jail with a 20-year sentence in a Bulgarian prison and unjustly. And I have got to
fight for that. So in fact that anger is going to channel, I think, more into: how do we get him
out of the situation?

PHILIP WILLIAMS: The first step is to lodge an appeal. That will happen in the next few days. Even
then it will be a year at least before there's even a chance at changing a situation all find

Two families - one who lost a son; another facing two decades in a Bulgarian jail - paying a
terrible price for a few mad moments two years ago.

To the weather: That's all from us, Lateline Business coming up in a moment. If you'd like to look
back at the interview with Greg Hunt or review stories or transcripts visit the web site visit the
web site at Now Lateline Business with Ali Moore.