Feb 15, 2006

Appropriation Bills No.3&4 (Climate Change)

Appropriation Bills No.3&4 (Climate Change)

15 February 2006

Mr ALBANESE (Grayndler) (5.37 pm)—There is a stark difference between the government and Labor in addressing Australia’s and the world’s most serious environmental challenge, that of climate change. The Howard government argues that economic growth and protecting the environment are incompatible. They are wrong. The Howard government also argues that economic growth and taking strong clear steps to avoid dangerous climate change are incompatible. They are wrong again. The Howard government argues that one comes at the cost of the other. This is not only old thinking, it is wrong in economics. The challenge of both economics and the environment is the same: to improve our quality of life. Our quality of life is affected when we are worst off for losing our job but our quality of life is also affected because we are worse off when we suffer from water shortages or land use changes.

The Howard government has taken far 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. The reason the Howard government is taking no meaningful steps to avoid dangerous climate change is because it is split over whether climate change is actually happening. Even amongst those in the government who agree that climate change is happening there is a serious split over what to do about it. No wonder the policies are a mess! Australia cannot afford to suffer through the inconsistencies of the Howard government’s policies.

These days you just do not know where the government stands. When it comes to whether climate change is happening, on the one hand, the environment minister said that climate change is a ‘very serious threat to Australia’. The next day he was in court challenging the very existence of climate change. One day the Department of Environment and Heritage was highlighting coral bleaching and the dramatic impact climate change would have on the Great Barrier Reef. The next day the industry minister said:

I think the Reef is in good shape. Those areas where it is being closely managed…it is probably in better shape than it has been for years.

This contradicts the AGO report, Climate change risk and vulnerability, which stated in 2005: Cairns and the Great Barrier Reef are expected to see multiple dimensions of change. The Reef itself is likely to suffer from coral bleaching events, which have long recovery times and flow on effects for the whole ecosystem. Climate model projections suggest that within 40 years water temperatures could be above the survival limit of corals.

With his comments—denying that the Great Barrier Reef is bleaching as a result of climate change—the Minister for Industry, Tourism and Resources is defying all the signs and, once again, is contradicting the Minister for the Environment and Heritage. The Minister for the Environment says that we need to reduce greenhouse gas emissions by 60 per cent by 2050. Yet, under the government’s policies, greenhouse gas emissions will—according to a report from ABARE—on a best case scenario, increase by 70 per cent to 80 per cent by 2050. On the one hand, we need to reduce emissions by 60 per cent while, on the other hand, emissions will actually increase by 70 per cent to 80 per cent under the government’s policies. That is the most optimistic assessment, if all the proposals discussed at the Asia-Pacific climate pact are adopted. Not only is the government divided on whether climate change is happening; it is also divided on policy. With respect to the Kyoto protocol, in 1997 the Prime Minister himself proclaimed that the protocol was, ‘A win for the environment and a win for jobs’.

Since then, the Prime Minister has backflipped. Now the Howard government regards the Kyoto protocol with the same affection as the National Party room regards Senator McGauran. In December 2005 the environment minister said the Kyoto protocol was ‘almost buried’. Yet recently, he said, ‘There has been no stronger supporter of Kyoto than the Howard government.’ Of course, Australia is one of only two industrialised countries that have not ratified Kyoto, and we are the highest per capita emitter of greenhouse gases in the world. 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, once again the Prime Minister has chosen to cast our response to this threat in ideological terms. Just like with the wheat for weapons scandal, this is a government that governs in its own political interest, not in the national interest.

Labor believes the debate over climate change is a debate about old ways or new paths. Pressured by vested interests, the Prime Minister has chosen the wrong path. 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 finding solutions. We need to act; delay is not an option. Just last week British Prime Minister Tony Blair indicated that, if the world does not take strong action within seven years, it may well be too late to avoid dangerous climate change.

The debate over climate change is also a debate about the Australian economy—whether we will be an economy of the future and whether we will prepare for the carbon-constrained future, which will be a feature of all economies in coming decades. It is also about the future of rural Australia—how our rural communities will adapt to an even drier continent. It is about smarter and more efficient use of precious resources such as water. It is about getting the new design of our homes and our buildings right and about being smart regarding energy efficiency. It is about using the new agricultural technologies and having the new household appliances. It is about managing the new service industries that will arise from this. 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 in a way which ignores where we need to be in future years? Labor believes that a national emissions trading scheme is the best way to reduce CO2 emissions in the most efficient way possible. By using market based mechanisms as a legal compliance tool, we will achieve the outcome in the most efficient manner.

Putting a value on carbon encourages industry to use less carbon and to use cleaner energy and sends a signal about the value of carbon in the economy. I have just met with BHP Billiton representatives in my Parliament House office. One of these executives of BHP Billiton, one of our great corporations, was talking about the options that are available to them and the need to have price signals when it comes to carbon if they are to make effective choices that protect their economic interests and look after the environment. Only yesterday at Senate estimates the environment minister said he supports emissions trading and price signals. Yet all through 2005 he was saying it was too expensive and would not work. On 31 July, 2005, the foreign minister said:

We know that emissions can’t continue at their current rate. That’s going to require research, collaborative research. It’s also going to mean we’ll have to investigate price signals coming from energy … By changing price signals, obviously that leads to changes in the investment patterns. You can get more investment into cleaner energy through changing pricing signals … About three weeks ago, in a speech in Los Angeles, the Treasurer said:

A market based solution will give the right signal to producers and to consumers. It will make clear the opportunity cost of using energy resources, thereby encouraging more and better investment in additional sources of supply and improving the efficiency with which they are used …

He also said:

Price signals in an efficient open market will promote new and more efficient investment …

So the Treasurer, the foreign minister and the environment minister are all on the record talking about price signals. There are really only two forms of price signals: emissions trading, opening it up to the market though a cap in trade system, or having a carbon tax. The Howard government says that it opposes both. It is an extraordinarily contradictory position that is stifling the Australian economy, because investors need certainty and if investment is going to be channelled into industry in a way which protects our long-term future, then those price signals are needed—and they are needed now.

What does the government say? The environment minister says we need price signals but not just yet. It is absurd to argue that what will be the world’s biggest market, the carbon trading market, is a positive development and that Australia should engage in that market but not yet. So we should wait for the world to get a jump on us before we enter that market, giving everyone else a head start! It is an absurdly contradictory position, but of course it is not the only contradiction that is there, because the environment minister says that the climate pact strategy is complementary with the Kyoto protocol and with the UN Framework Convention on Climate Change. Yesterday in Senate estimates when officials from the department were asked about who was working on the UN Framework Convention on Climate Change and who was working on the Asia-Pacific climate pact—where the obligations are the same except one has six countries and one has 189 countries involved including all of the six—an official advised the Senate committee that they were the same people by and large doing the same work, which is consistent with the UN Framework Convention on Climate Change. And yet the government refuses to ratify the Kyoto protocol.

It refuses to ratify the Kyoto protocol in spite of the fact that it argues that we are going to meet our target under Kyoto. So we are giving up the economic opportunities that are available through instruments such as the clean development mechanism where nations can gain carbon credits for investments in clean energy in developing countries. This is an instrument of which there are already 60 projects under way and more than 500 in the pipeline. It is a mechanism which Australia, due to our geographical location in the world, is particularly well placed to take advantage of. Yet the government refuses to ratify the Kyoto protocol because it says that voluntary approaches are enough by themselves.

Margaret Beckett, Secretary of State for Environment, Food and Rural Affairs and head of the EU delegation to the recent UN climate change summit in Montreal said:

The public debate has opened up wide differences between those who argue we should go forward with compulsory targets to cut emissions and those who argue new technology is the way ahead. I believe this is a false choice. The one is no use without the other.

But without mechanisms in the form of compulsory action, such as targets to cut emissions, existing and new technologies will never be rolled out on the scale we need.

To be absolutely clear: the UK believes voluntary measures can be helpful, but compulsory action is a surer way of delivering results. That is why the UK is a strong supporter of the Kyoto Protocol.

That is why the Australian Labor Party is a strong supporter of the Kyoto protocol. The Howard government’s lack of action on climate change will hurt our economy.

The appalling approach to Australia’s solar energy industry is a stark example of where the government has it all wrong. The Howard government is being grossly irresponsible and short sighted in slashing solar electricity rebates to community organisations and schools. It is simply bad policy to phase out the financial incentives for residential and commercial solar power installations. It is appalling that the Howard government has already halved the maximum rebate to community organisations and will gradually phase out the amount that can be claimed by private home owners. The reality is that this rebate has played a major role in encouraging Australian organisations and householders to take up photovoltaic systems which produce low-cost electricity and emit no greenhouse emissions. The future economy is evidenced by the fact that the global market for solar accelerated 65 per cent in 2004. What economic managers would not want to be a part of that action? Australia was well-placed to be the Silicon Valley of solar energy 10 years ago. But, after nearly a decade of being starved of support, it is hard to see us returning to that position.

The government’s big deception is that greenhouse gas emissions are on track. The truth is that we will only meet the target because of the actions of the Queensland and New South Wales state Labor governments. The Parliamentary Secretary to the Minister for the Environment and Heritage, in the matter of public importance debate in the federal parliament yesterday, said that it did not matter whether we are going to meet the target, thereby hiding the fact that under the federal government’s policy, because the land use changes had not been taken into account yet, greenhouse gas emissions in Australia actually rose by 23 per cent between 1990 and 2003. Even taking into account land use changes the projections from the Australian Greenhouse Office are that there will be a 23 per cent increase in greenhouse gas emissions by the year 2020.

This contrasts extraordinarily with what is going on in other parts of the world. China has just announced a 15 per cent mandatory renewable energy target. Most nations in Europe, including the European Union as a whole, have targets of around 20 per cent by the year 2020. Developing countries are engaged in these issues as well—countries such as Brazil and South Africa. Yet here in Australia we have a two per cent mandatory renewable energy target, which has been reached, and support for the renewable energy industry is declining because of that.

The truth is that we do need new technology. It is a matter of how it is applied. If you do not have market based mechanisms then you will not have that application. Governments need to use a combination of technology push and market pull policies to drive innovation in clean and efficient energy use and production. The argument for waiting for emissions trading contradicts all experience. It is the triumph of hope over experience, because innovation comes in response to market demand. It does not come by itself. That is why that market demand needs to be created.

We need a multipronged strategy to join the global community in avoiding dangerous climate change. We should ratify the Kyoto protocol, introduce a national emissions trading scheme to encourage clean energy use, introduce a climate change trigger into the Environment Protection and Biodiversity Conservation Act and substantially increase the mandatory renewable energy target. This is the challenge which faces us. We have a responsibility to future generations to take up that challenge.