CARBON POLLUTION REDUCTION SCHEME

Adjourned debate on motion of Hon. David Winderlich:

That the council—

1. Notes that economists and environmentalists are claiming that flaws in the Rudd government carbon pollution reduction scheme will mean that initiatives by state and local governments, and the installation of solar panels by households, will not reduce greenhouse emissions; and

2. Calls on the Premier, Mike Rann, to seek an assurance from the Prime Minister, Kevin Rudd, that his carbon reduction scheme will not undermine the efforts of the South Australian government, South Australian councils and South Australian households to cut greenhouse pollution.

(Continued from 4 March 2009. Page 1504.)

The Hon. I.K. HUNTER (20:16): On behalf of the government, I want to thank the Hon. David Winderlich for bringing the Carbon Pollution Reduction Scheme and the efforts of the South Australian state government to reduce carbon emissions to the council's attention. However, since the honourable member moved this motion in this place on 4 March, a series of changes to the Carbon Pollution Reduction Scheme have been announced by the Prime Minister, Kevin Rudd. On 1 April this year, the Premier, Mike Rann, wrote to the Prime Minister proposing that voluntary action be recognised and valued under the CPRS, which was included in the changes announced by the Prime Minister on 4 May. Because of these recent announcements, I move the following amendment:

That this council—

1. Notes that the federal government carbon pollution reduction scheme exposure draft bill, as released on 10 March 2009, does not fully account for the contributions from initiatives by state and local governments, and the installation of solar panels by households in the reduction in greenhouse emissions.

2. Notes that the Premier, Mike Rann, wrote to the Prime Minister, Kevin Rudd, in April proposing that voluntary action by individuals and households be recognised under the CPRS and advised the parliament of this on 28 April 2009. In addition, the state government submission to the Senate Select Committee on Climate Policy recommends that voluntary action be factored into setting the national emissions cap and trajectory.

3. Notes that on 4 May, the Prime Minister, the Hon. Kevin Rudd, announced a number of changes to the CPRS, including mechanisms for recognition of voluntary action.

These changes reflect the current situation, which has changed since the motion was first moved, and my amendment seeks to take that into account, whilst, I hope, still retaining much of the honourable member's original intent, at least as I understood it.

The changes that were announced on 4 May this year go a long way to addressing the concerns that some have raised about the scheme. The commencement date of the CPRS has been delayed by one year (to 1 July 2011), and there is now the provision for an unlimited number of permits to be made available at a fixed carbon price of $10 per tonne for the first year of the scheme (2011-12), with full emissions trading to commence in 2012-13.

The Prime Minister also announced a widening of the emissions target cut from 5 to 15 per cent to 5 to 25 per cent from 2000 levels by 2020, providing that a comprehensive and ambitious agreement is made at the Climate Change Conference in Copenhagen in December 2009.

An increase of $300 million in the Climate Change Action Fund has been announced, which will bring the fund to $2.75 billion; and a five-year 5 to 10 per cent increase in assistance levels for emissions intensive trade exposed industries will be implemented. The Australian Carbon Trust will be established, which will enable households to voluntarily contribute to reducing Australian emissions.

The Prime Minister has also announced that there will be direct recognition of GreenPower purchases at about 2009 levels in setting the scheme's caps. The initial cap for 2011-16 was set using 2009 as a baseline, while the 2016-17 cap will reflect increases in GreenPower sales between 2009 and 2011.

I am pleased that the federal government has demonstrated its flexibility and its willingness to respond to community opinions regarding the Carbon Pollution Reduction Scheme, and I commend the amendment of the motion to the council.

The Hon. M. PARNELL (20:20): The Greens will be supporting this motion in its unamended form, and we congratulate the Hon. David Winderlich for bringing it to the council. The debate around the commonwealth's carbon pollution reduction scheme has attracted a great deal of genuine anxiety in the community because it is seen to be a fraud. The initial CPRS is increasingly known in the community as the 'carbon polluters reward scam'. In short, it is a joke. I do not support the amendment because that perpetuates the fraud.

The announcement earlier this month that the honourable member has referred to makes the scheme friendlier to big polluters, and the slight amendment of targets from between 5 and 25 per cent is a green distraction. The 25 per cent is effectively a hypothetical target. If the world does agree, in Copenhagen, to tough action on climate change, Australia will have to sign up for a 40 per cent reduction in greenhouse emissions by the year 2020 to pay our share.

That means that if we want the world to take us seriously then we need to be putting the 25 per cent up front as a minimum and unconditional offer. That is why the Greens in the Senate have offered to work constructively with the government to make this flawed scheme one that does send us in the right direction and offers some hope for genuine reduction in carbon pollution.

The other changes that were announced earlier this month are, again, retrograde steps. The scheme has been delayed. There has been a cap put on the price of carbon at $10 per tonne for the next year. Together, these things guarantee that, essentially, there will be no climate action in Australia until July 2012, at the earliest. Any action that individuals, companies or state governments take will simply make it cheaper for big polluters to keep polluting.

The shift that was announced that the honourable member referred to that is supposedly aimed at taking account of voluntary action will, in fact, do nothing of the sort. In fact, those mums and dads who are already digging deep into their pockets to reduce their climate impact are going to have to reach into their pockets again in order to have their emissions reductions counted. I think that is an insult to their efforts.

The Greens will not be supporting the amendment of the Hon. Ian Hunter, which seeks to gloss over the absolutely flawed approach being taken by the government in the CPR scheme. The motion before us calls on our Premier to seek an assurance from the Prime Minister that the carbon pollution reduction scheme will not undermine the efforts of the South Australian government, South Australian councils (local government) and South Australian households to cut greenhouse pollution. It is not a difficult call to make and I think we should make it; we should make it loudly and we should make it tonight.

The Hon. S.G. WADE (20:23): I rise to indicate that the opposition will also be supporting the motion moved by the Hon. David Winderlich. We believe that this motion is important. I believe it is important for two reasons in particular. First, it deals with one of the most challenging issues of our time, climate change. Secondly, it highlights this government's focus on spin rather than substance.

On the first point, this motion addresses the enhanced greenhouse effect. The prevailing scientific wisdom is that since the beginning of the Industrial Revolution humans have put so much greenhouse gas into the atmosphere that the world's climate has altered as a result. Numerous scientific studies warning of the possible consequences of continuing down this path have prompted many governments to implement policies to reduce the level of greenhouse gas emissions.

Internationally, the European Union commenced an emissions trading scheme in 2005, and the United States of America, the world's largest economy, I understand, is set to have climate change legislation introduced by the end of this month. In Australia, the federal government is wanting the federal parliament to pass its carbon pollution reduction scheme by 30 June, although that deadline is looking increasingly unrealistic.

There is much debate about the design of this scheme. If we are going to have a scheme, it is important that it is well designed so that it meets its objectives. One of the issues highlighted in relation to the scheme is the extent to which it takes account of the activities of households, local government and state governments. This brings me to the actions of the Rann government in this area.

Since coming to power over seven years ago, the government has promoted itself as environmentally friendly. In a press release, dated 18 February 2008, the Premier said that his administration would aim to make all government operations carbon neutral by 2020. Mr Rann also committed to offsetting 50 per cent of greenhouse gas emissions from its operations by 2014, which would be achieved by purchasing 50 per cent of its electricity requirements from Green Power and the balance by purchasing other carbon offsets.

What do these measures really mean in the context of reducing Australia's overall gas emissions? The Hon. David Winderlich's motion highlights that all this activity may do is free up scope for more greenhouse gas emissions elsewhere. Actions of state government and local councils could be undermined by the proposed emissions trading scheme. To understand why this is so, one must look at the scheme and how it works. The federal Department of Climate Change provides a summary of the scheme on its website. Among other things, that summary states:

the government sets a cap on the total amount of carbon pollution allowed in the economy by covered sectors;

the government will issue permits up to the annual cap each year;

industries that generate carbon pollution will need to acquire a 'permit' for every tonne of greenhouse gas they emit;

the quantity of carbon pollution produced by each firm will be monitored and verified;

at the end of each year, each liable firm would need to surrender a permit for each tonne of carbon pollution that the firm produced in that year; and

firms compete in the market to purchase a number of permits that they require.

In relation to this motion, the key point is that the scheme only relates to covered sectors. That was in the first dot point of the government's summary. The state government is not one of those covered sectors.

The Rudd government's CPRS sets a target which is both a floor and a cap—it is the maximum and the minimum. So, as local government bodies, state governments and households are not included in the CPRS, any reductions in pollution that they achieve will simply free up pollution permits that can be traded to polluters included in the scheme. In giving evidence to the Senate Select Committee on Fuel and Energy on its reference on the CPRS, the ACT Minister for Energy, Hon. Simon Corbell (who is a Labor member), noted:

We are concerned that actions by states and territories to go beyond the targeted CPRS reductions may not achieve real emissions reductions as these actions may not correspond to fewer emission permits. Further investigation by the commonwealth is required to identify whether efforts by states and territories to go beyond the targeted CPRS reductions can meaningfully contribute to reducing emissions. It is a significant concern of mine that state and territory jurisdictions may not be able to implement more stringent climate change policies that contribute to achieving real reductions in emissions. If this is the case, the coverage of the CPRS severely limits the scope for the ACT to take effective action on climate change.

The Senate Economics Committee also did a report on the CPRS. Its report, entitled 'The exposure draft of the legislation to implement the Carbon Pollution Reduction Scheme', was tabled on 16 April 2009. The main report called on the federal government to address the issue of the undermining of voluntary abatement efforts under the CPRS. In their dissenting report, coalition senators said:

[They] are of the view that voluntary action and complementary schemes should not be rendered ineffectual in the overall plan to reduce carbon emissions. Many people, whose votes are influenced by the Labor Government's promised action on carbon emissions, would be greatly discouraged if the proposed CPRS disempowered them, allowing for emitters to benefit from the voluntary actions rather than the environment.

The federal government has announced several changes to the scheme, including offering tax deductions to individuals for carbon credits. But even if those changes adequately allow for actions of individuals—and that is not clear—state and local government initiatives are still not covered under the proposal. Essentially this means that the state government is subsidising carbon emitting industries with taxpayers' money. You do not have to be a climate change activist to see that the Rann government measures in this area are bad policy.

These measures to make the South Australian government greener are a waste of money and will not have an impact on reducing the country's greenhouse gas emissions if the CPRS continues in its current flawed state. The government has offered us an alternative motion. The opposition still prefers the Hon. David Winderlich's motion for three reasons in particular. First of all, we welcome the admission by the government in its first clause that the flawed nature of the CPRS is not a matter of opinion; it is a matter of fact.

The Hon. David Winderlich, modest as ever, asserts in his motion that economists and environmentalists are claiming that there are flaws in the CPRS. The government motion, on the other hand, notes that the scheme does not fully account. The government is at least honest enough to say that the Rudd government CPRS is flawed.

The Hon. I.K. Hunter interjecting:

The Hon. S.G. WADE: I am sorry; I am only taking the government at its word. Perhaps I should have asked for authentication as to whether it was a genuine document. In relation to other matters, the government's motion also explicitly does not refer to local government. We believe that local government is a significant contributor both to our efforts in relation to the environment and to our general economy. We believe that local government should not be excluded, as does the state government's motion. It raises the question of why the state government, in its alternative motion, chose to ignore such a significant sector.

Thirdly, the Hon. David Winderlich's motion actually asks for action: it asks the Premier to seek an assurance. The government's motion merely asks us to note the items on his correspondence file. We want the government to do something. We expect the Premier to stand up for state jurisdictions to make sure that the efforts of the state jurisdiction, in both its local government and state government form, are respected within the CPRS.

In terms of the basic thrust of the motion, I gather that the government supports the sentiment of the Hon. David Winderlich's motion. We prefer it to the government's form, and we will be supporting the motion in its unamended form.

The Hon. DAVID WINDERLICH (20:32): I also still support my original motion, surprisingly enough. I think we should keep this very simple. It is important to not be distracted into broader discussion of the CPRS, which is a complex scheme, and the range of changes that the Rudd government announced on 4 May. The whole point of my motion—it is a very simple motion—is about whether or not the CPRS actually takes into account voluntary action, the things that individual householders, local governments and state governments do on a voluntary basis to bring down greenhouse emissions. It is very clear that issues of state and local government action were not addressed in the changes announced on 4 May.

The question of household action to reduce greenhouse emissions was partially addressed, although we are not really clear what it means. Household efforts are claimed to be covered by the revised Rudd scheme but, regardless of whether or not a household becomes carbon neutral by, for example, installing solar panels, their reduction in emissions will not count towards national targets unless they contribute additional money towards a trust fund that buys carbon credits.

Many people want to do something practical, such as put solar panels on their roof. The government has come up with a plan whereby putting money into a trust fund and then contributing to the trading game is the only way you can make a difference. That is clearly not what is motivating most people. The flaw in the government's amendment is simply that it seeks to argue that voluntary action has been taken into account, when it clearly has not.

Let us put that in very concrete terms. Because the CPRS does not take into account the actions of householders when they do something practical, such as putting solar panels on their roof, or because it does not take into account the voluntary contributions of state and local government, many of which are quite substantial and cumulatively across Australia would run into hundreds of millions of dollars, it means that programs such as the government's Greening of Government offices initiative is almost certainly a waste of time and money.

It means that the installation of solar powered streetlights by local government is almost certainly a waste of time and money. It means that putting solar panels on top of Parliament House is a waste of time and money. It means that plans to purchase 50 per cent of electricity requirements from renewable energy sources by 2014 and to make government operations carbon neutral by 2020 are a waste of time and money. It means the black balloon advertising program, which urges householders to reduce their emissions, is a waste of time and money. All the efforts and all the funds invested in these programs will not affect greenhouse emissions one iota if these voluntary contributions are not taken into account in the emissions trading system—which they are not.

As the Hon. Stephen Wade and I have previously explained, this occurs because the emissions scheme is based on trading a fixed number of pollution permits among a limited number of big polluters. Any efforts made on a voluntary basis by parties that are not included in this scheme, such as households, councils and state governments, will simply take the pressure off those parties that are within the scheme. Richard Dennis, of the Australia Institute, explains it in this way: if households install solar panels it will just reduce demand for power, which means that power stations will be able to trade pollution permits, which will be freed up by the fact that they are not selling as much to households, to another polluter—for example, a manufacturer.

In other words, there will be trading but there will have been no reduction in emissions. Yet, state governments all around the country—and this state government—are encouraging people to do their bit to reduce greenhouse emissions. The rhetoric, the rebates and the black balloon ads exhort people to act and imply that they should spend their money to combat climate change and, because people care so deeply, they have responded. Households spend tens of thousands of dollars on solar panels. They lobby their councils to spend council rates on reducing greenhouse emissions. They want state governments to spend money to combat climate change.

So, to take the hard earned money of the community and to take their even more hard won goodwill and manipulate it in this way is a dreadful abuse of trust. Any party or government or parliament that does not expose and condemn this abuse of trust is an accomplice in a cynical hoax. I think it is essential that we send a very clear message to the community and to Canberra that we want serious and honest action on this vital issue. We want the goodwill and hard work of individual households and local councils—and some of these are quite small councils where there are pressing demands on their resources—to be taken seriously and to be treated with respect.

I think we need to endorse this motion and send a very clear message to Canberra that they need to include voluntary effort or at least stop pretending that they are including it, and the same should apply to state governments. We should either fix this scheme so that those voluntary efforts matter or stop enticing people to take action on the pretext that their voluntary efforts do, because at the moment it is a waste of everyone's time and money. It will not help greenhouse emissions. The only possible benefit is the public relations spin, and that will soon wear thin as more and more people come to see the flaws in the scheme. I hope that the council will support the original motion.

The council divided on the amendment:

Majority of 3 for the noes.

Amendment thus negatived; motion carried.