Carbon Credits (Carbon Farming Initiative) Bill 2011

The question before this House is whether this package of bills, the Carbon Credits (Carbon Farming Initiative) Bill 2011 and cognate bills, should be supported or not. This legislative scheme can be summarised as a good concept but with bad execution. Unfortunately, that is a problem all too frequently with the measures this government is proposing and putting forward for consideration by this House.

We have a government that has a dismal track record of actually delivering outcomes. The home insulation scheme, with some good intentions, but terribly executed, resulted in four deaths, over 150 house fires, a lot of shoddy workmanship, a lot of money wasted and absolute chaos being created in the insulation industry. We had the Building the Education Revolution program, where a series of scandalously expensive buildings were put up around the country, often costing twice as much, or more, per square metre than the going market rate, and quite often not meeting the genuine needs and requirements of schools. The program went over its original budget due to an unfortunate misunderstanding between the department of the then Deputy Prime Minister and the department of finance. Or indeed, there was the Digital Education Revolution, which we have just learnt has now…

On the question of relevance and the capacity of the government to execute a program encompassed in this bill, nothing could be more relevant than the track record of this government in executing programs. We have a package of measures before the House this evening and the question the House is called upon to determine is: do we have confidence that the policy measures set out in this legislation are likely to be delivered?

Let us remind ourselves what this package of measures aims to do. The intention is that it be a policy mechanism by which this nation is able to reach its bipartisan emissions target, which is that by the year 2020 there will be a five per cent reduction in greenhouse gas emissions compared to the level of the year 2000. The particular policy mechanism set out in this bill is to create incentives for farmers and land holders to undertake voluntary projects to achieve carbon abatement in the land sector. The bill creates a new form of private property, the Australian Carbon Credit unit, and there is a series of other quite complex arrangements in this legislation.

I put three propositions to you and the House this evening. Fundamentally, on this side of the House we are very supportive of measures designed to drive a reduction of greenhouse gas emissions or an abatement of carbon in the agricultural sector. Indeed, that is a key element of the coalition's direct action plan on climate change. The second proposition I want to put to the House is that key aspects of this legislative and policy scheme depend upon details that are to be set out in the regulations, and the regulations have not yet been provided in their totality. That is why we have moved an amendment that would decline to give this bill a second reading at this stage. The third point is that insofar as the legislative scheme is fully revealed in the bill there are serious questions about the rigidity of some of the requirements to comply with this scheme in order to be eligible for the treatment under it. Let me turn firstly to the question of principle. As a matter of principle, is it a good idea to seek to capture carbon emissions in soils, trees and other biological matter? Are we in the coalition supportive of so-called biosequestration? Of course we are supportive of it. We think it is an important policy tool. Indeed, it is a key element of the coalition's direct action policy on climate change. To that extent, we certainly welcome the implicit endorsement in the bringing forward of the legislation contained in the coalition's Direct Action Plan. We welcome the endorsement of the fundamental principle that biosequestration is an important policy tool open to the Australian government and the Australian nation in seeking to reduce our volume of carbon emissions.

We note with considerable interest the fact that this year the CSIRO released a report entitled Greenhouse gas mitigation: sources and sinks in agriculture forestry. The author of this report was the head of the CSIRO Sustainable Agricultural Flagship, Dr Michael Battaglia. In his report, Dr Battaglia pointed to the great potential for biosequestration in reducing greenhouse gas emissions. In fact, the report stated as follows:

We can potentially increase these stores in our rural lands and perhaps store or mitigate enough greenhouse gases to off set up to 20 per cent or more of Australia‘s emissions during the next 40 years.

There is agreement on the concept that biosequestration is a good idea and that establishing a mechanism to 'incent' the owners of land to engage in such activities is a good idea. Unfortunately, that is where the consensus ends.

I now turn to the second principle argument that I want to put to the chamber this evening, which is that critical details inherent in this policy scheme have not been made clear in the materials provided to the House, particularly in the wording of the bill itself. This piece of legislation has been put forward before the key details have been sorted out. And it is with some regret that I must note that this is again an all too familiar pattern from the government—we have a concept but, sadly, the details have not yet been filled in. The climate change assembly was announced during the 2010 election campaign before all of the details for it had been worked out. Cash for clunkers was also a little light on detail at the time it was announced and before it suffered an ignominious policy death—much like the climate change assembly. Of course, I could mention other policy areas such as the East Timor regional processing centre or, indeed, the Malaysian five-for-one people swap. Again these are areas in which the Gillard government, the Labor government, announces a concept but then it turns out that the hard work of the detailed policy thinking has not been done and the government is simply unable to implement a detailed and workable scheme.

This is a matter of acute relevance to the question which is before the House this evening, because what we are being asked to do by this government is to take it on trust that it will sort out the details. We are being asked not to worry about matters of specifics. We should not worry, for example, about precisely what activities will qualify as abatement under this legislation because that detail will be sorted out. 'Don't you worry about that' is what we are being told. I am minded of the aphorism: fool me once, shame on you; fool me twice, shame on me. And I am also relieved that I managed to get that out accurately, unlike the notorious occasion when the former President of the United States, George Bush, did not.

But the core principle is the relevant one here. When we have a government that has a record of coming forward with schemes that are light on detail and when this government has proven itself unable to execute those schemes in an efficient, well-managed manner, it is completely appropriate for this House, for the people's house, for the House of Representatives, to say, 'No. We will not pass this legislation unless you give us the detail of how this is going to work and in a form that we are able to make an assessment of.' We do not have that detail right now, and on this side of the House we are not prepared to take this government on trust.

Let us examine some of the specifics in this bill for which we do not have the detail. The very core of this policy scheme is that certain activities will be eligible for a credit and certain activities will be eligible as abatement; however, we do not actually know what they are. We do not know what those activities are going to be, because that is going to depend upon the regulations. There will be a so-called positive list of activities which qualify, which meet this requirement of so-called additionality, but at this stage we simply do not know what those activities are. Yet this government is asking us in this House to provide a blank cheque. This government is asking us to wave this legislation through when we do not have sufficient detail to make an assessment. These are not peripheral matters. This is the very heart of this legislative scheme, and that is why we have on this side of the House moved an amendment to decline the second reading of the bill until such time as the regulations are provided and we are able to see and assess the detail.

Of course, it would be theoretically possible to wave this through, but to do so would simply not be prudent. It would not be good management. Also, it is not something that we on this side of the House are prepared to countenance, because we have seen on all too many occasions good intentions on the part of this government turn into a deeply unsatisfactory, poorly administered reality. We are saying here: let us pause; let us wait until we can see the detail, and then we can make an assessment of whether in fact this is a legislative scheme that lives up to the high ideals articulated for it and whether it is a legislative scheme that we are able to support.

In the time that remains to me, let me turn to the third area that I would like to highlight. Insofar as the details have been provided, some of the requirements that are proposed appear to be unnecessarily rigid and inadequately responsive to feedback from potential market participants, including, for example, plantation forestry and plantation organisations.

(in continuation) Before my remarks to the House last night were abruptly terminated by the procedural requirements of this place, I was coming to the third of the three principal points I want to make, which was that in so far as the necessary details for this legislative scheme have been provided, one of the requirements made clear in the legislation appears to be unnecessarily rigid and impractical and therefore not likely to contribute to the success of the scheme and its fitness to farmers and other private sector interests in being incented to behave in the way the scheme is intended to incent for them to behave. I refer to the requirement that sequestration must be permanent to be eligible under the scheme. The bar for permanence has been set very high. The requirement is that the sequestration must be effective for 100 years.

It seems rather unclear as to the basis on which this 100-year requirement has been set and it appears to be a matter of considerable contention as to whether that figure has any particular scientific basis or whether it has been based upon a bureaucratic stroke of the pen. Quite a number of interested parties have appeared before both the Senate and the House inquiries into this matter, including Carbon Farmers of Australia and the Australian Plantation Products and Paper Industry Council, who have identified concerns with this particular provision.

In conclusion, we say on this side of the House that this particular measure is good in concept but, sadly, is poor in execution. Until we see the details, we are not in a position to support it.