Carbon farming opportunities for the rural sector (26/05/2011)

09 January 2013

carbon-farming300.jpgA speech on the Government's Carbon Farming Initiative by Stephen Jones MP.

Carbon Credits (Carbon Farming Initiative) Bill 2011, Carbon Credits (Consequential Amendments) Bill 2011, Australian National Registry of Emissions Units Bill 2011 - Second Reading.

Mr STEPHEN JONES (Throsby) (Wed 25 May 2011, 12:56):

I AM PLEASED to be speaking on the Carbon Credits (Carbon Farming Initiative) Bill 2011 and cognate bills because they are part of a comprehensive series of measures to deal with dangerous climate change. Those measures include putting a price on carbon. At the same time, we will be providing relief to industries that cannot reduce their carbon emissions because of the nature of their production processes and we will also be providing relief to households during the transition. It is also about improving carbon storage by using our natural advantages, such as our vast tracts of landfarmland and other landwhich are available for carbon storage and sequestration. It is about investing in research and development and putting in place renewable energy targets. It is a comprehensive policy because, unlike those opposite, we believe there is no silver bullet to deal with this important issueit is probably the most important issue this parliament is going to have to deal with.

I would like to contrast our position with the coalition's approach, which stems from their attitude to the science. Depending upon what week of the year you catch him on, the Leader of the Opposition will be giving a nod to the science on one day and then a nod to the deniers on the next day. He will be giving a wink to the Left of his caucus on one day and then a wink to the Right of his caucus on the next day. In fact, he has so many positions on this and is nodding in so many directions that it is no wonder that some days he looks like he has policy whiplash.

The second approach of the coalition is all about huffing and puffing, and we will see why in a moment. We saw the ridiculous pantomime this week while the Leader of the Opposition was wandering around the state of New South Wales. One day he popped up in a Weet-Bix factory and made the outrageous claim that somehow a carbon price is going to make kiddies choke on their Weet-Bix. When the facts get out we will realise that if it has any impact at all it will be less than 0.000in fact, there are so many zeroes we can hardly get to the cost. We then saw him pop up in a fish market, amidst the oysters and the caviar, making claims about how the carbon price will lead to an outrageous rise in the cost of fish. Little did he know that there is going to be no cost impost at all. I am very pleased that over the last week he started to be called out on these issues and brought to account for the outrageous claims he is making. We can understand why he is all huff and puff because his strategy is to say to the Australian people, with this great distraction, 'Look over there, because while you're looking over there, I've got my hand in your back pocket to the tune of about $750 per annum. I'm going to use your money to pay the big polluters. I'm going to use your money to subsidise the big carbon emitters in this country,' such as those confirmed by the shadow environment spokesperson overnight. He wants to reach into the pockets of Australian taxpayers, take that money out of their wallets and give it to what are, in many instances, overseas multinational companies, to assist, to implore, to encourage them to reduce their carbon emissions. So let us not be fooled by the huff and puff of the Leader of the Opposition. It is a pleasure today to speak on what are a comprehensive series of measures to deal with catastrophic and dangerous climate change.

The Carbon Credits (Carbon Farming Initiative) Bill fulfils Labor's election commitment to give farmers, forest growers and landholders access to carbon markets.

In doing so, the bill provides opportunities for the agricultural sector to participate in abatement measures which will complement the other measures being advocated by those on this side of the Houseand indeed by some on the other side of the House who weekly start to question the madness, lack of conviction and schizophrenia in the policy of the Leader of the Opposition. The legislation will provide opportunities for farmers and landholders to participate in the domestic and international carbon offset markets, and that is an important point. The carbon farming initiative provides landholders with access to an additional and diversified source of income.

It is interesting that we see people in this parliament who once upon a time represented the rural sector and farmers who criticise this policy. Through the crafting of its policy, Labor has excluded the farm sector from the Carbon Pollution Reduction Scheme and the carbon tax on the one hand; on the other hand, it is providing them with a potential revenue stream. If those on the other side, including the Deputy Leader of the Opposition and Leader of the Nationals, who just spoke, truly did represent the rural sector, they would be rushing out here and saying, 'This is great legislation and we will be supporting it because it will provide an important revenue stream for our constituents.'

What sort of revenue stream? Eligible activities under the framework outlined in this bill include emission reductions from fertilisers and increasing carbon sequestration, which avoid greenhouse gas emissions and/or increase carbon storage. Carbon farming and the initiative outlined in the legislation before the House today, in effect, is the legislative framework that in large part represents what the coalition are currently proposing in relation to climate change. The key difference is that our legislation and this initiative is part of an overall package of many measures because we understand that there is not one silver bullet.

Carbon farming measures alone, without a commensurate reduction in carbon pollution, will not bring us to the emission reductions that are urgently needed. This was confirmed by the Climate Commission yesterday and has been repeated in numerous forums by eminent scientists, including those from the CSIRO. On this side of the House, we recognise that it is important that the agricultural sector begins the work of adapting to a low-carbon future and assists us in that journey.

The Gillard government knows that there are abatement opportunities waiting to be taken up and that it is important that the framework puts this in place. However, we would never be so foolish as to think that this one measure alone, carbon faming, could achieve anywhere near the magnitude of what we need to achieve a cut to our carbon emissions. Let me explain this.

The government's targets are to lower emissions by five to 25 per cent below 2000 levels. Even at the five per cent reduction target, which I understand is bipartisan, this will be no easy task and we cannot do this without all sectors of the economy including industry, agriculture, households and manufacturing all working together to the same end. That is to say, carbon farming alone is not the answer.

Experts have described the coalition's policy as being so environmentally ineffective that it will deliver only 25 per cent of the required carbon pollution abatement. So for the coalition to meet the bipartisan target of minus 25 per cent, they need to find somewhere another 75 per cent of carbon pollution abatement. Advice from Treasury to the coalition said that these:

"... measures alone cannot do the job without imposing significant economic and budget costs. Moreover, many of the direct action measures cannot be scaled up to achieve significant levels of abatement, and for those that can be scaled up, the cost per tonne of abatement would rise rapidly."

The Leader of the Opposition has shown no signs of being able to grasp the magnitude of what, as a nation and an economy, we are dealing with here. We know that if Australia takes no action by 2020 our carbon pollution could be 20 per cent higher than in 2000, not five to 25 per cent lower.

We simply cannot achieve cuts to our carbon pollution by relying on tree-planting initiatives, as the Leader of the Nationals has said, and better fertilisers. The coalition's policy is not practical or effective. We need to ensure that our most productive land continues to be used for food production and is not diverted into tree planting for the purposes of trading carbon credits. That is one of the concerns that arose during the extensive consultation process that accompanied the drafting of this legislation. he risk of the coalition's policy is that this is exactly what would happen. No-one can therefore take it seriously as an alternative policy. And what about the financial impact? Those opposite like to talk about waste as if they were speaking from a position of economic purity, but the reality is far from that. I could not explain the cost of the coalition's policy better than by using the exact same words the member for Wentworth used last week in his Lateline interview:

"The coalition's policy, as laid out by Tony Abbott and Greg Hunt, involves spending taxpayers' moneytaking out of the budget so many billions of dollars to pay farmers in particular ... it is a multi-billion-dollar exercise."

And he went on:

"But the way it works is that the taxpayer the taxpayers' moneywould be used to buy carbon offsets from farmers, so that as industry pollutes, the government would then spend taxpayers' dollars to buy carbon offsets to offset that pollution."

We know that the coalition's policy, as I have described it, is a publicly funded licence to pollute. It would cost over $30 billion rather than the $10.5 billion that has been outlined. That is because the coalition would need to purchase about 75 per cent of the required abatement from international permit markets at a cost of about $20 billion, for which no funding is currently available. So it does not appear that anyone over there even has the policy courage to think all of this through. The coalition's policy is confused and contradictory. Like much from the other side of the House, it is a reflection of that fact that they simply lack conviction in this area.

Just last night the member for Flinders, the opposition spokesperson, told the ABC that a coalition government would pay large brown-coal-fired electricity generators to reduce their pollution by switching to gas-fired generation. As natural gas is far more expensive for generating electricity than brown coal, the coalition's policy would see either electricity prices rise, with no assistance to households, or the coalition having to subsidise the electricity generators. Those subsidies would cost taxpayers billions of dollars and would have to continue for decades, given that electricity-generating plants are long-lived assets. The only way to avoid rises in electricity prices under this scenario would be through indefinite taxpayer subsidies to the generators.

If the coalition's publicly funded pollution licence ever came into being, the average Australian family would be slugged at least $720 per annum. They would be worse off by 720 bucks per annum. So this publicly funded licence to pollute is a policy folly that Australia cannot afford either financially or environmentally. We need all sections of our economy working together. We urgently need our top 1,000 polluting companies to be playing their part and doing what they can to become more environmentally friendly.

The introduction of a carbon price will be a historic measure for this country. It will be a historic measure for this parliament too when legislation that reflects this country's resolve to deal with climate change becomes law in this place. I acknowledge that a significant reform like this is not easy. Building a consensus for a major change is never an easy task. However, if you are entrusted by the electorate to form government, you have a reciprocal obligation to act responsibly and to do what you believe is in the national interest. There is simply no other option.

If those opposite were truly serious about doing something to reduce carbon emissions, were serious about taking advantage of our natural assets and were serious about doing something in the most cost-effective way and the most efficient way, they would get on with our package of reformsa package of reforms which includes these bills before the House today. These bills will enable farmers and the forestry sector to engage in the carbon abatement measures described in the legislation and to receive a financial reward for it and to play a part in the overall national effort. That national effort will require reform of all industries and all sectors of the economy, and an effort by households as well, to do what we need to do to play our part in an international effort to reduce carbon emissions and to avoid dangerous climate change.

I commend the legislation to the House.