May 30, 2005

Appropriation Bills 2005-2006 – Why ratifying Kyoto would be good for Australiaâ

APPROPRIATION BILLS 2005-2006 – Second Reading

Why ratifying Kyoto would be good for Australia’s economy

30 May 2005

Mr ALBANESE (Grayndler) (7.50 p.m.)—There is a stark difference between the government and Labor in addressing Australia’s and the world’s most serious environmental issue—that is, of course, climate change.

The Howard government argue that economic growth and protecting the environment are incompatible.

The Howard government also argue that economic growth and taking strong clear steps to avoid dangerous climate change are incompatible. They argue that one comes at the cost of the other.

This is not only old thinking; it is wrong in economics.

Economic theory has always had a place for the environment, and good environmental practice has always made good economics.

The challenge of economics and the environment is the same—to improve the quality of our life.

Just as we are worse off when we lose our job, so too we are worse off when our water and land dry up.

The extended four-year drought gripping Australia is the most dramatic example of climate change to hit our nation.

Today the government announced its drought package. It is extraordinary that just three weeks after the budget the government would announce such a considerable package as if there was not a drought in the middle of May.

Last week it announced that there would be a $500 million package. Somehow $250 million got lost along the way. The government was out there leaking its position, but it could not deliver in the end.

Drought is a serious issue. Drought is a product of climate change. Drought does require short-term packages and alleviation for people on the land. But it also requires a long-term strategy to avoid dangerous climate change so that this is not a permanent feature of our landscape.

As a result of changes to our climate caused by greenhouse gases, climatologists predict that Australia is going to get progressively drier over the coming century.

Even with the best efforts of farmers, some productive land will become marginal and marginal land will turn barren. That must be avoided at all costs.

After four long years of drought, the Howard government has taken too long to address the devastating symptoms of climate change.

Critically, the Howard government is even slower to wake up to the real causes of climate change.

Just look at its record.

The Prime Minister cannot stop saying No when it comes to taking action on climate change. He said No to the Kyoto protocol; he said No to greenhouse emissions trading; he said No to a higher renewable energy target; he said No to real cuts in greenhouse pollution.

The recent abolition of the Australian Greenhouse Office, confirmed in this budget, symbolises the government’s lack of concern about climate change.

John Howard’s refusal to engage with the realities of climate change means that greenhouse pollution continues to skyrocket.

Confronted with the crisis of climate change, the Prime Minister has become the climate change anti-hero.

As Arnold Glasow once said: “One of the true tests of leadership is the ability to recognise a problem before it becomes an emergency.”

The Prime Minister has failed that test.

In 1997 the Prime Minister proudly proclaimed that the Kyoto protocol was:

… a win for the environment and a win for Australian jobs.

The Prime Minister was right then but he is wrong now.

Now he thinks Australia can act alone to address the most serious challenge facing the global community. Australia is one of only two industrialised countries which have not ratified Kyoto. Australia is the highest per capita emitter of damaging greenhouse gases in the world.

The government does not seem to even understand the position.

When the Minister for Foreign Affairs was at the dispatch box the other day he spoke about the dangers of Labor wanting Australia to sign up to the Kyoto protocol. But the Kyoto protocol was signed; Senator Robert Hill signed it in 1997. The government signed the Kyoto protocol. What we say is that it should be ratified.

While the Prime Minister recently acknowledged climate change was not a myth, he said the debate over climate change was a choice between the economy and the environment.

Unbelievably, given the threat that climate change poses to our economy as well as our environment, the Prime Minister has cast our response to this threat in ideological terms.

But this is not a debate about Right or Left.

This is a debate about right and wrong.

It is a debate about old ways or new paths.

Pressured by vested interests, the Prime Minister has chosen the wrong path.

Instead of seeing climate change as a first order issue, the Prime Minister has opted for second- or third-best policies to address this serious threat.

Climate change is real—it is hurting our economy, our communities and our environment right now.

The debate over climate change is really about what kind of society we want to live in.

It is not about blame; it is about solutions.

We need to act because delaying is simply not an option.

It is about what sorts of jobs we want in a decade and what sorts of jobs we want our children and grandchildren to have.

The debate over climate change is about getting the Australian economy geared correctly so that we can encourage the innovation Australia needs for the future.

The debate is about the future of rural Australia and about how our rural communities adapt to an even drier continent.

It is about the smarter and more efficient use of precious resources such as water.

It is about protecting the quality of our air, our food and our water.

The debate over climate change is about getting the design of our new homes and buildings right.

It is about making sure that our cities and our regional communities are sustainable.

It is about land management and getting those practices right.

It is about using new agricultural technologies and having new household appliances.

And, of course, it is about managing the new industries that will service them all.

The threat of a changing climate must make us look at how we use and apply our skills and technologies in the future.

Do we apply our resources to industries that warm our world or do we use our capabilities to combat warming?

The Howard government is complacent over climate change. The abolition of the separate Australian Greenhouse Office exemplifies that. Now it will be incorporated as just another section in the Department of the Environment and Heritage along with the National Oceans Office.

Just last week, the Minister for the Environment and Heritage released the 2003 greenhouse gas inventory.

This is an annual stocktake of emissions for each major sector—for example, energy, transport, agriculture and land use. It confirmed that the only reason we are on track to meet our Kyoto target is because of action taken by state Labor governments, in particular the Carr and Beattie governments, to stem land clearing.

It also confirms that the Howard government is doing nothing to control our soaring energy and transport emissions.

The key findings from that inventory were that emissions from land use change and forestry fell by 26.8 per cent between 2002 and 2003, emissions from stationary energy rose by 37.2 per cent between 1990 and 2003, and transport emissions rose by 28.8 per cent between 1990 and 2003.

While net greenhouse emissions have only increased a small amount, this was due to the land and forestry policies of state governments.

In reality, the figures confirm our worst fears—something that does not seem to be understood by ministers such as Minister Downer or others on that side of the House. Greenhouse emissions continue to soar and there are no plans to fix the problem.

It has been estimated by the Australian Greenhouse Office, a government body, that emissions will increase by 23 per cent by 2020.

At a time when the world is setting itself targets of decreasing emissions by 50 or 60 per cent by 2050, and the minister for the environment in the Howard government has said that that is necessary, the actual projections show a massive increase over the next decade and a half.

This projected increase in emissions poses a serious health risk and a major environmental problem, yet it is under this scenario that the government has abolished the independent Greenhouse Office. This projected increase in emissions is happening while governments all over the world, such as the Blair Labour government in the UK, are setting those long-term targets.

The recent Senate inquiry into the energy white paper concluded that the energy white paper would delay critical action on climate change for another 20 years. The Senate inquiry report shines a light on John Howard’s failure to act on climate change. The report says firstly that the energy white paper:

… is a blueprint for delay in reducing Australia’s greenhouse gas emissions and will be directly responsible for the high cost to future generations of Australians—environmentally and economically.

Secondly, it says that the white paper:

… fails to accept the evidence that global warming has already begun and therefore action to reduce emissions needs to be taken immediately …

And, thirdly, it says the paper lacks:

… an effective plan to cut greenhouse pollution, a long term target to boost renewable energy or a long term plan to control the spiralling pollution from the energy and transport sectors.

So the Howard legacy is increased emissions and the silencing of the voice which revealed this fact.

That is the wrong way to go, but it is consistent with a government that is determined to silence independent voices on the environment.

That is why it has made a massive attack on independent environmental organisations, the community based groups that hold government and opposition accountable—community based groups that we do not always agree with but which play an important role in civil society.

The changes to the GVEHO program for voluntary organisations are about silencing that dissent, silencing that voice that communities have when it comes to environmental issues.

Labor’s approach is very different.

We are committed to ratifying the Kyoto protocol, we are committed to introducing an emissions trading scheme and we are committed to developing a strong clean energy industry through a strong mandatory renewable energy target.

We are also committed to changing the Environment Protection and Biodiversity Conservation Act to make sure there is a greenhouse trigger in there.

It is an outrage that the government has not taken action on that, for the Kyoto protocol represents an important change in the attitudes of nations. It shows they are serious about addressing climate change. I t is not perfect—no international agreement ever is—but it is an important step forward and, most importantly, it represents a global response to a global problem.

Countries such as Canada, Japan, New Zealand and every country in Europe are adopting domestic measures to implement the Kyoto protocol.

Countries like India and China have developed the necessary frameworks so that they can take advantage of clean development mechanisms under the protocol.

Labor is committed to ensuring Australia gets the economic benefits from cutting greenhouse emissions.

The Kyoto protocol is essentially a carrot and stick approach. The stick is that you have to meet your target; the carrot is that you get access to emissions trading and carbon credits.

That is why the Treasurer took a proposal about emissions trading to the cabinet in August 2004, but it got knocked down by the narrow-minded Prime Minister.

I say to the minister at the table, the Minister for Ageing, and to other Costello supporters: all power to you. It is about time that we consigned the Prime Minister to the past, where he is much more comfortable, because Kyoto is about the future. It harnesses the power of the market by putting a price on carbon. The carbon trading system will be worth billions of dollars in Europe alone. Doing the right thing by the environment makes economic sense.

The Chief Scientist advising the government, who also happens to be the chief technology officer at Rio Tinto, has stated that Australia needs to reduce its emissions by 50 per cent by the year 2050. This will mean a reduction of about 300 million tonnes of carbon dioxide emissions.

At present, the market in carbon emissions puts the price per tonne at approximately $10. Greenhouse abatement in Australia is potentially a massive market. There will be a lot of economic activity and there will be huge opportunities if the policy settings are right.

Emissions trading is the best way to reduce CO emissions because by using market based mechanisms as legal compliance tools we will achieve the outcome in the most efficient manner.

Under a trading scheme, rather than saying you must reduce emissions and you must pay the cost to do so, you must reduce emissions but it is up to you if it is more effective in cost terms to buy or sell. It gives you much more flexibility.

The biggest advantage is that emissions trading makes reducing emissions cheaper and, by doing so, makes the ability to act stronger. Carbon trading gives companies flexibility in meeting emissions targets, thus offering the most cost effective way for energy intensive industries to reduce emissions.

Potentially, an organisation in Australia such as the Sydney Futures Exchange could become a trading hub for the Asian region, bringing jobs and economic benefit to Australia.

The plans of the Sydney Futures Exchange to operate as a carbon trading hub are on ice, waiting for the government to decide if Australia will join the lucrative market.

I encourage those opposite to talk to an Australian insurance group such as AMP about what this system is and how the failure to ratify the Kyoto protocol means that there is a risk element there which will constrain investment in our economy.

Labor knows what it means to change the economy for the better.

That is what the Hawke-Keating government did and what the current government is riding on the back of.

The Hawke-Keating government reformed Australia to the nation’s long-term benefit.

The economic challenge, however, never ends. It is like riding a bike: you need to keep pedalling or you will fall off.

Just as the Hawke-Keating government got the price of capital and exchange right through financial deregulation, the entry of foreign banks and other economic reforms, so the next wave of productivity bonuses needs to get the price of our natural resources right—the price of water, carbon and timber right. The market will encourage appropriate outcomes; therefore, it will be good for the economy as well as for the environment.

Of course, we all know we have a massive problem with exports at the moment.

BP, one of the world’s largest energy suppliers, improved its bottom line by $US650 million by establishing and trialling an internal carbon trading market.

According to the BRW, while the European renewable energy is booming, Australia is missing out on billions of dollars of investment because of the Howard government’s inertia.

Australian companies such as Macquarie Bank are investing in massive renewable energy projects in Europe and Britain, but in Australia it is not happening.

In short, to sustain prosperity we must sustain the planet.

A couple of weeks ago, I was fortunate to visit a new wave power facility, operated by EnergyTech at Port Kembla near Wollongong, with my colleagues the member for Throsby and the member for Cunningham.

This is cutting edge technology, designed and operated in the Wollongong region. Given the right support by government and Australian industry, this could be a world beater and a major generator of Australian jobs and Australian export dollars.

The project funnels waves into a collector which causes air to rush through the chamber which in turn drives the turbine.

Quite literally, it harnesses the power of the ocean to light up the city.

At the moment, it is a demonstration project—a single device could power 2,000 homes without producing greenhouse emissions.

EnergyTech reckons the wave energy project has export potential of up to $5 billion.

If Australia ratified the protocol, Australian companies such as EnergyTech could export environmental technology to the region under the clean development mechanism; but they cannot do that. They are locked out of it because of the government’s refusal to sign the protocol.

Climate change will be a central factor in the quality of life of generations to come.

Government failure on this issue highlights the strategic difference between the major political parties.

Labor believes that good environmental practice has always made good economics.

Good farmers know that and so do good policy makers.

The challenge of economics and the environment is the same—to improve our living standards.

Only Labor has the vision to deliver policies to avoid dangerous climate change and only Labor has the vision to deliver policies aimed at securing our long-term prosperity.