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Tuesday, 11 August 2009
Page: 4504

Senator FURNER (5:36 PM) —I rise today to talk about something that is close to my heart: the environment. Today we are facing one of the biggest problems of our lifetime: climate change. Climate change is affecting everyone and it is time we step up to the mark and fix what we as humans have broken before it is too late. I was privileged, like other senators, to be part of the Senate Economics Legislation Committee’s inquiry into the Carbon Pollution Reduction Scheme Bill 2009 and related bills, a member of the Senate Select Committee on Climate Policy and a participating member to the Senate Select Committee on Fuel and Energy at its Gladstone hearing.

The experiences were an opportunity to hear from copious witnesses from renewable energy technology areas, environmental conservation groups, a variety of all types of businesses, scientists and action groups. I take this opportunity to thank the secretariat and my fellow senators, particularly Senators Cameron, Feeney and Pratt, for their commitments in dealing with possibly the most crucial piece of legislation this century and with over 8,000 submissions.

Senator Ian Macdonald —What about me!

Senator FURNER —I mentioned ‘all senators’! Overwhelmingly, evidence among climate scientists both in Australia and internationally is that climate change caused by human activity is posing a major and rapidly escalating threat to the earth’s physical environment, to the economies of every country and, ultimately, to the sustainability of human life on this planet. Australia is one of the hottest and driest countries in the world and will be hit by the brunt of climate change if we do not act. The state of Queensland, which I represent, is one of the states that will be greatly affected by climate change. We have been exposed to drought, floods, cyclones and fires. With a population of more than four million people we cannot afford to sit back and watch sea level rises potentially cause floods. We cannot risk carbon dioxide levels doubling. We cannot risk temperatures rising further and nor can we just sit and watch the destruction of the Great Barrier Reef or the demise of our agricultural industries. All of these would have huge implications on our state, not just our health but our businesses and our livelihoods for many generations to come. If we sit here and do nothing there will be nothing left for our children or our children’s children. I am not prepared to tell my great-grandchildren that we sat here and did nothing to stop it.

I believe in tackling tomorrow’s issues today and that is also what the Australian Labor Party believes in. The Rudd Labor government’s Carbon Pollution Reduction Scheme will do just that. The strategy is based on reducing Australia’s greenhouse gas emissions, adopting a climate change strategy that we cannot avoid and helping to shape a global solution. The government’s commitments are targets of an unconditional commitment to reduce carbon pollution by five per cent from 2000 emissions levels by 2020 and a new ambitious 25 per cent target by 2020 if the world agrees to an ambitious global deal to stabilise levels of CO2 equivalent at 450 parts per million or lower.

The way Australia will achieve this goal is through a cap-and-trade scheme, which will see companies and individuals pay for their carbon emissions. For every tonne of carbon dioxide equivalent emitted into the atmosphere, one emissions permit must be surrendered. The way the cap-and-trade scheme will work is by auctioning off the permits. Those who need the permits the most will pay more for them. There will be a limited number of permits issued, pushing the prices up higher. With the price of the permits being too high for some emitters, they will be motivated to find more environmentally friendly ways to conduct their business as it would be cheaper to just reduce emissions. Users will also be able to trade these permits. The cap-and-trade scheme is an effective way to reach our targets by 2020. The cap will help us reach the target of reducing carbon pollution and it will give carbon a price. Trading will enable emissions to be reduced at the lowest possible cost. The quantity of emissions will be monitored, reported and audited and those who do not comply will be penalised.

The scheme will affect about 1,000 Australian companies that produce more than 25,000 tonnes of carbon pollution each year. This is just one per cent of the number of registered businesses in Australia. The sale of these pollution permits will help us all to adjust to this scheme and to become a more environmentally friendly country. While the government understands that this will be a very big task, we are doing everything in our power to ease the transition to becoming a greener Australia.

The Rudd Labor government will cut fuel taxes on a cent-for-cent basis to offset the price impact on fuel by the Carbon Pollution Reduction Scheme. This will be assessed periodically and a review will be held after three years. The government has decided to delay the start of the Carbon Pollution Reduction Scheme by one year in order to help Australian companies manage the impacts of the global recession. We in the Labor Party do not accept the view that Australia should wait until there is an international agreement on climate change before taking action. We also reject the view that Australia will be alone in taking such action. A global agreement to cut greenhouse gas emissions is the most desirable way to proceed. Nevertheless, other countries are acting in advance of such an agreement, and so should we.

Australian businesses are currently dealing with the worst global financial crisis since the Great Depression. In this environment, the government has decided to act to further support jobs and assist businesses during these difficult economic times through the following measures: a new global recession buffer, which will be provided as part of the assistance package for emissions-intensive trade exposed industries; a one-year fixed price phase will apply, with the transition to full market trading from 1 July 2012, and during this fixed price phase each carbon pollution permit will cost $10; and funding for eligible businesses and community organisations to undertake energy efficiency measures in 2009-10 as part of a $200 million tranche of the Climate Change Action Fund.

To encourage carbon pollution reductions before the scheme starts, reafforestation will be eligible to voluntarily generate permits for carbon stored from 1 July 2010, creating economic opportunities in regional Australia. The expanded Renewable Energy Target will also be in place as planned from 2010 to drive investment in Australia’s vast renewable energy resources.

The Carbon Pollution Reduction Scheme represents one of the most significant reforms ever of the Australian economy. Unfortunately, there is no cost-free way to transition to the low pollution economy of the future. That is why the government has set out a comprehensive package of financial assistance for Australian households. Through the household compensation package pensioners, seniors and carers will receive additional support, above indexation, to fully meet the expected overall cost of living flowing from the scheme. Other low-income households will receive additional support, above indexation, to fully meet the expected overall increase in the cost of living flowing from the scheme. Around 90 per cent of low-income households—or 2.9 million households—will receive assistance equal to 120 per cent or more of their cost-of-living increase. Middle-income households will receive additional support, above indexation, to help meet the expected overall increase in the cost of living flowing from the scheme, and for middle-income families receiving family tax benefit part A the government will provide assistance to meet at least half of these costs. Around 97 per cent of middle-income households will receive some direct cash assistance and around 62 per cent of all middle-income households—or 2.4 million households—will receive sufficient assistance to meet at least half of these costs. And motorists will be protected from higher fuel costs from the scheme by cent-for-cent reductions in fuel tax for the first three years.

Already the government has acted decisively in introducing the Appropriation (Nation Building and Jobs) Bill, Energy Efficient Homes program, which not only provides environmental investments for householders by reductions in energy use and savings on energy bills but also generates thousands of jobs in this global financial crisis. The legislation will support jobs and sets Australia up for a low-carbon future in installing free ceiling insulation in around 29 million Australian homes. In addition, under the Energy Efficient Homes investment, the solar hot water rebate has increased from $1,000 to $1,600. The Energy Efficient Homes package will modernise Australia’s homes and will enable almost all Australian homes to be operating at a minimum two-star energy rating by 2011. It is up to us to ensure something is done to slow down climate change so that there is something left for our future generations. That is why it is important that Australia steps up on the international arena with its own scheme.

By implementing the Carbon Pollution Reduction Scheme we will put ourselves in the company of other developed nations who are fighting climate change and trying to reduce their carbon emissions. There are schemes already operating in 27 European countries. Twenty-eight states and provinces in the United States of America and Canada, as well as New Zealand, have introduced emissions trading schemes and Japan is considering its own scheme. By joining other countries taking action on climate change, we are putting ourselves in a better position at the international negotiating table. It will be better for us economically and will enhance opportunities of becoming a low-carbon-emitting country.

Taking action earlier rather than later will enable us to have a smooth transition to becoming a more environmentally friendly nation. According to Kyoto accounting provisions, Australia’s net greenhouse gas emissions were 576 million tonnes of carbon dioxide equivalent. Our biggest contributor is the energy sector, which emitted 400.9 tonnes. The second highest contributor is the agricultural sector and then transport.

The Carbon Pollution Reduction Scheme will have broad coverage to ensure prices are kept lower for consumers. These sectors include stationary energy, transport, fugitive emissions, industrial processes, waste and forestry sectors, as well as all six greenhouse gases counted under the Kyoto protocol. The scheme will be managed by giving direct obligations to facilities with large emissions and obligations on upstream fuel suppliers to offset the emissions produced from the combustion of fuel. Forest landholders will be given the opportunity to opt in and agriculture emissions will not be included at the commencement of the program. Instead the government believes it needs more consultation with industry to determine the best way to include the agricultural sector and to reduce emissions.

As well as helping Australians become more energy efficient, assistance will be provided to businesses via the Climate Change Action Fund. This will help businesses transition by providing a range of activities through partnership funding, including investment in innovative, new, low-emissions processes, industrial energy efficient projects with long payback periods and dissemination of the best and innovative practice among small- to medium-sized enterprises. Transition assistance will also be provided to emissions-intensive trade-exposed industries. Companies may find it difficult to compete in the international market if they are competing against countries that do not have an emissions trading scheme.

Evidence provided during the inquiries from high-emitting industries claimed that they may look at moving overseas, which would be no benefit to the environment. This is called carbon leakage. To prevent carbon leakage, the government will be assisting EITEs by providing a share of free permits. This will only be applicable to businesses that are at high risk of carbon leakage. The opposition were quite vocal on their concern with the cost of this scheme. If we sit here and do nothing, the cost will be even greater to our future generations. This is explained in Australia’s low pollution future: the economics of climate change mitigation.

According to the comprehensive report and overwhelming evidence provided during the inquiries, early global action is less expensive than later action; a market based approach allows robust economic growth into the future, even as emissions fall; and many of Australia’s industries will maintain or improve their competitiveness under an international agreement to combat climate change. This was supported by many businesses and credible financial institutions who provided evidence throughout the inquiries.

The Treasury’s modelling even states that Australia and the world will continue to prosper while reducing carbon emissions. It also demonstrates that Australia will have advantages by taking early action on climate change. If emission pricing expands gradually across the world, economies that defer action will face higher long-term costs as global investment is redirected to early movers.

I must also stress that consultation has been an imperative part of the CPRS process. We have ensured that everyone has been given the opportunity to have a say when it comes to this important scheme. When the Carbon Pollution Reduction Scheme green paper was released last year, the government received about 1,000 submissions. We also conducted a number of industry and non-government organisation roundtables. The Garnaut review, which consulted extensively, was also established. The Minister for Climate Change and Water and other ministers held meetings with stakeholders. The Department of Climate Change ran regional and city based forums after the green paper was released and again held capital city based forums after the white paper was released. The exposure draft of the legislation was released and referred to the Senate select committee inquiry, which took submissions and has delivered its report. From that list of consultation processes, it is evident that the government is committed to giving everyone a chance to have their say on this important piece of legislation.

Keeping people employed is important to the government. At a Senate Economics Committee meeting in Canberra on Wednesday, 25 March 2009, Dr Heinz Schandl, Senior Research Leader, CSIRO Sustainable Ecosystems, said a greener economy would see an extra 2.5 million to 3.3 million jobs for Australians, with 230,000 to 340,000 high-impact environmental jobs in the energy, transport, agriculture and construction sectors. Dr Schandl said, ‘We conclude, therefore, that achieving the transition to a low-carbon economy will require a massive mobilisation of skills and training both for existing workers and new workers.’ By reducing our carbon emissions and becoming a greener economy, not only will we be providing a better future for our children but also we will be putting more jobs on the table.

As a senator from Queensland I believe it is important that we take action to protect the environment and make sure that we have something left for our children and their children to inherit. A carbon pollution reduction scheme is the best way forward in tackling climate change. By reducing our carbon emissions we can reduce the effects of climate change. If we do nothing, the sea levels will keep rising, temperatures will soar, we will see more and more tropical diseases such as dengue fever and malaria and we will lose ecological wonders like the Great Barrier Reef.

The Queensland government put forward a submission to the Carbon Pollution Reduction Scheme green paper. I will read into the Hansard an extract, in part, of that submission. It said:

Scientific modelling indicates that Queensland is particularly vulnerable to the physical impacts of climate change, with two of the six IPCC ‘hot spots’ being Queensland’s wet tropics (including the Great Barrier Reef) and south-east Queensland. Major vulnerabilities include extinction of species, deterioration of coral reefs, loss of buildings from increased flooding and storm surges and reduced availability of surface water.

                         …                   …                   …

... Queensland is the most heavily affected of the States compared to a business as usual scenario.

Australia had a decade of denial, delay, reviews and neglect under the past government. The world will meet in December this year to nut out a global agreement. Passing the CPRS will ensure we play our part at Copenhagen and sign up to do our bit. Failing to legislate the CPRS will give other countries an excuse not to act.

In the 2007 election both major parties promised to introduce an emissions trading scheme to reduce Australia’s carbon pollution. Mr Turnbull, who was then the Minister for the Environment and Water Resources in the Howard government, supported an emissions trading scheme. He told the National Press Club in May 2008 that ‘the emissions trading scheme is the central mechanism to decarbonise our economy’. He also indicated that the coalition would back the government’s target range of five to 25 per cent at global negotiations at Copenhagen in December this year.

Since then there has been a steady retreat from this position, apparently under pressure from climate change sceptics—or should I refer to them as the ‘crazy uncles’?—in his own party and in the National Party. It is important to reflect on the words of the member for Wentworth in the Hansard of 26 March 2007. As the Minister for the Environment and Water Resources he said:

The Australian government is working closely with industry and with the community on practical programs that will ensure that Australia continues to lead in its climate change strategy.

                …            …            …

The Australian government is committed, and has been committed for many years, to dealing with the challenge of climate change. We are dealing with it with practical, workable measures that have results.

There have been no results, no change and no position—nothing but empty statements coming from an opposition that would not do anything for climate change during their time in government. They do not seem to have the credentials in this chamber. In June this year they deferred until now the debate on this particularly important piece of legislation. They certainly did nothing on climate change while they were in government for 11½ years, and now in opposition they wish to drag it out even further. Just like their recent disgraceful and misleading attacks on the Prime Minister over fabricated emails, the opposition have shown who they are. How can the public trust them on climate change let alone with the capacity to govern? Once again there is no proposal from the opposition, only divided rhetoric resulting in an 11th hour magic pudding.

Every poll shows that the Australian people continue to support strong action against climate change. The government has a mandate to act on this matter and should do so without further delay. The Australian people will judge harshly those parties and individual legislators who place our country’s economic and environmental future at risk by obstructive action on such a vitally important issue. In fact recent research indicates that 78 per cent of voters want the Liberal Party to back the CPRS laws. (Time expired)