The Nationals Senators disagree with the majority report and support the Coalition Senators' dissenting report.
The Nationals welcome evidence to the Inquiry that finally recognise that action on climate change will disproportionately impact certain groups, industries, and regions. It is also now widely recognised that the vast majority of existing and new industries as a result of this bill will occur in the regions.
The Nationals policy of Net Zero by 2050 was predicated on strong caveats. These include protecting our natural environment, but also ensuring that regional jobs, regional communities, and regional industries could both seize the opportunities and be supported to overcome the challenges that a path to Net Zero would bring.
The Nationals have sought to bring a pragmatic approach to the debate which focuses on impact not ideology.
To this end we were able to secure more than $20 billion of investment in regional Australia as the first down payment on path to net zero.
The Nationals have also ensured that future governments would be required to independently assess the impact of climate change action on regional Australia and be able to pause ambition if required via Australia's Nationally Determined Contributions (NDC) as required by the Paris Agreement. The Nationals note that one of the first actions of the Albanese Government was to remove this safeguard.
Regional impacts and inequality
The Nationals believe in practical action to address the impacts of climate change and a 'no person and no place left behind' approach be maintained.
The Nationals believe that the legislation fails to address the cumulative impacts of transitioning too quickly and the risks that this could cause serious impairments to our food supply, cost of living, energy security and the viability of some of our regional economies.
The Nationals believe a sensible approach to net zero should be through investing in technology, infrastructure, manufacturing and world leading management practices which will help industries innovate, diversify and grow.
Regional communities must be encouraged and supported by government to continue to grow and build resilience as our economy could undergo the largest transformation since the United Kingdom joined the European Economic Community.
The Nationals believe that decarbonising the economy must be consistent with our national values of freedom, respect, fairness, and equality of opportunity.
We believe the Australian Government cannot guarantee, through a leap of faith alone, that the promise of carbon neutral jobs from new industries, energy projects and technology will be compensation enough for the inevitable job losses in key parts of Australia.
In a technical paper for the UN Framework Convention on Climate Change, which is convened on behalf of the Conference of the Parties (COP), the responsibilities of Governments embarking on decarbonising their economy was clear:
A global transition towards a low-carbon and sustainable economy has both positive and negative impacts on employment…Policymakers must smooth the edges of this transformation by developing just transition policies for affected workers and their communities.
But this is not enough. Many of the more militant submitters were calling for a rapid closure of coal and gas projects, calling on the Government to refuse to approve any new projects. Our party sees a strong future for the mining industry. And the Nationals will not countenance any proposed transition support being merely welfare for coal and gas industry workers.
The committee received evidence from the Institute of Public Affairs (IPA) that this legislation will have significant economic and social consequences. Research by the IPA has identified that to reach the new legislated goals at a minimum:
All 89 coal, gas, and oil projects currently in the construction pipeline must be cancelled. This will come at the cost of at least $274 billion across Australia, which is the equivalent to approximately 14 per cent of Australia's annual GDP. Resulting in the cancellation of approximately 480,000 jobs which would have otherwise been created by those 89 projects.
The committee also was presented evidence from the IPA that:
…a typical worker in regional Australia is over three times more likely to have their jobs put at risk by the policy of net zero emissions by 2050 than a typical worker in the inner city. This is because workers in regional areas are far more likely to work in industries, such as coal mining, heavy industry, and agriculture…
In 2021, the European Union announced the 'European Green Deal' package of more than €500 billion to provide tangible investments to deliver sustainable social outcomes as member states transition their economies. Given the uniqueness of our economy and that our national economic well-being is currently heavily dependent on mining, a similar package for Australia should be commensurate.
Neither the Bills nor the Government, to date, have acknowledged the necessity for financial assistance as has been proposed by the EU or the UN. The committee was not furnished with any evidence, either submission or testimony, that the government has any intention of a similar package being developed or considered.
While Europe has led the way on global efforts to decarbonise its economy, its member countries have also been confronted with, and subsequently been forced to deal with, unexpected geopolitical, economic, and, indeed, climate realities that have resulted in member countries pausing their ambitions. Individual EU member countries have recognised that protecting their own citizens must come first to ensure adequate supplies of heating, and reliable, affordable baseload power to sustain their national industries.
The Nationals maintain a firm commitment to reliable and affordable power generation as the foundation of our national economic and social well-being.
The Nationals also maintain that protecting the livelihoods of Australians must come first and that a responsible national government must have the option of being able to pause its climate ambitions in response to geopolitical, economic and social impacts.
The National recommend the establishment of a Regional Socio-economic Impact Assessment mechanism by legislation, to monitor and review the impacts on regional Australia, its communities and industries, of Australia's Nationally Determined Contributions under the Paris Agreement. It could include local socio-economic indicators such as gross regional product; regional economic output; regional employment, wages and salaries, regional electricity and energy pricing; regional population and other factors deemed relevant.
The assessment (undertaken by a body such as the Productivity Commission, reportable to a Minister and tabled in the Parliament within specified time frames) would occur every five years ahead of but in line with the review and updating of Australia's Nationally Determined Contributions (NDC) as required by the Paris Agreement. It would mandate an Economic Cost Threshold which, if breached, would permit Australia to pause its climate action.
The Nationals consider that legislating a 43 per cent reduction in CO2 emissions by 2030 without a complimentary package of financial support for affected communities and carbon intensive industries, particularly in rural and regional Australia, presents a clear and present danger to the welfare of our communities.
The Nationals believe a guaranteed investment package on similar lines should be developed leveraging opportunities generated from the global focus on technological advancements to decarbonise economies. To this end The Nationals successfully delivered a first tranche package for more than $20 billion for regional Australia to develop new areas, new industries and to diversify impacted regions.
Several witnesses to the inquiry outlined that an independent regional authority was a priority. Ms Westacott from the Business Council of Australia said:
The second and really crucial point that came out of those presentations across the world was the importance of having the new system in place before you dismantle the existing system—that was one very key learning out of many countries who've done this transition—and the importance of regional focus and, to Tim's point, the importance of very clear early action across all fronts—skills et cetera—to make sure that regions transition effectively.
The Business Council of Australia has recommended a dedicated transition authority that specifically looks at regions and looks at certain industries and does particular modelling of local impacts and opportunities.
Mr Tony Wood from the Grattan Institute added:
The work that we've looked at in terms of the way some of this will play out in Australia is that a lot of the physical activity will occur in Australia's regions—and that applies both to the likely loss of jobs coming from the phasing out of fossil fuel over the next 20 or 30 years, but also to the opportunity that could come from the industries that could be established in those same regional areas, depending upon how we play our comparative advantage in this country. For us that suggests two things: firstly, it still does require leadership from the Commonwealth and, secondly, there is a very strong role for regional transition authorities.
Similarly, Mr David Cross, Chief Executive Officer of the Blueprint institute stated:
Something that Blueprint in particular would like to see is the establishment of coal adaptation authorities in the regions, staffed by people from those regions. In particular, the function of these adaptation authorities would be to develop the adaptation plans as we phase gracefully away from coal.
The Nationals believe there is widespread community and industry support to establish a regional transition authority, or several, to address specific regional communities and economies.
Contribution to the world's emissions reduction
Mr Rundell from the Australian Workers Union told the committee that:
For example, there has been some discussion and debate around including the Environmental Protection and Biodiversity Conservation Act, which would run a risk of what is essentially a short-sighted rejection of fossil fuel projects at the federal government level, without recognising the way that Australia's gas can aid decarbonisation globally.
Resource shortfall
There was significant evidence that although Australia hosts an abundance of minerals and metals essential for producing the equipment and technologies needed for the transition not enough is being done to harness them. The Australian Workers' Union gave evidence that:
By 2030, globally, we need to increase lithium production fourfold, double rare earth element output, deliver a 67 per cent increase in nickel and produce 32 per cent more copper.
The work and materials needed to construct a transmission network able to deal with the Government's stated aim of 82% renewables by 2030 is under real threat of failure because of this resource shortfall. If the government is not able to deliver this aspect of their plan, it means that they will have to achieve the legislated goal by cutting other emissions and industries.
Over the last two decades we have been told that we must listen to the experts and transition to Net Zero, listening to the experts over the two days of hearings we heard, for example, the evidence of the Australian Industry Group that:
To achieve the net zero transition, we are going to need to build a lot of big things and many distributed small things around the country: major new mines for lithium, for rare earths and for a range of other inputs.
Which is not an issue given the evidence of Professor Matthew England that:
We've got an abundance of lithium and silicate and copper.
Our new Net Zero economy relies upon increased rooftop / farmed solar projects and electric vehicles coming these elements require rare earth minerals sooner rather than later, however the problem was highlighted in evidence from the Minerals Council of Australia:
In terms of what is being suggested, we will need a lot more copper investment to occur, and nickel and cobalt to occur.
I don't think we're on the right trajectory with things like copper; we're not exploring enough and not finding enough of the new mines of the future.
So, if we are to transition to Net Zero we need to increase mining of rare minerals this will also assist in growing our economy and offsetting potential job losses. The Business Council of Australia gave evidence that:
We see mining as an incredibly important part of the Australian economy going forward—in fact, probably playing a bigger role than what it does today.
Farming and land use
Significant concern was held for the use of offsets on productive land and the management of those lands.
Mr Ragg from the National Farmers Federation said that:
…where it does concern us is that the enhanced ambition may create a greater demand for offsets, and this will create a tension on the use of agricultural land for offsets-only projects. We prefer an integrated approach, to maintain productive capacity that also recognises multiple-use landscapes…
Mr Atkinson from the National Farmers Federation gave evidence that:
…in the last month, I have poisoned and shot and trapped over 150 pigs on my farm and next door, which is a public estate. They have done zero. Farmers are really concerned that there must be adequate resources to properly manage these areas that are going to be used for public land. So it's a really big issue for myself and a lot of farmers…
The Nationals also believe that increasing the productive timber estate is essential for decarbonisation and future use needs.
The Australian Forest Products Association submission recommends that:
Government, including through the Climate Change Authority, acknowledge the benefits of additional production forestry plantations and to prioritise implementation of the One Billion Trees plan as a way to enhance livelihoods in regional communities while also generating substantial benefits for the Australian environment and economy.
Nationals Senators remain concerned that the government or any company purchasing or leasing land for offsets are not compelled to adequately maintain their land to allow best practice pest and weed control.
Recommendation
That the Senate does not pass the bills.
Recommendation
That an independent assessment (undertaken by a body such as the Productivity Commission) be tasked with performing a Regional Socio-Economic Impact Assessment every five years ahead of but in line with the review and updating of Australia's Nationally Determined Contribution (NDC) as required by the Paris Agreement.
Specifically, this independent assessment, reportable to Parliament, would mandate an Economic Cost threshold or similar, which would enable Australia to pause its climate ambition in the wake of unintended economic and other events.
Recommendation
That the Australian Government commit to ongoing funding, in line or in excess of the first tranche of more than $20 billion provided for by the Coalition Government in its March 2022 Budget, for regional Australia to enable regions to seize the opportunities for growth and overcome the challenges that its legislated target will bring.
Recommendation
That Australia pursues improved and more transparent emissions accounting methodologies that better recognise the contribution Australian exports such as fuel and food make to global emission reduction.
The Nationals Whip in the Senate
Senator the Hon Bridget McKenzie
Leader of The Nationals in the Senate
Deputy Leader of The Nationals Party