Carbon Market Institute Speech

As we meet here today on Gadigal land, let us also acknowledge the truth that there is no inequality in the world that climate change doesn’t make worse.

And we also know that our response to climate change will be made immeasurably better by listening to those communities most impacted.

In Tangentyre, outside Alice Springs earlier this year I listened to elders about their experiences.

91 per cent of remote Indigenous households experiencing an electricity disconnection at some point during the year.

74 per cent more than ten times in a year.

And not just for a minute – but for hours or days.

Wiping out critical refrigerated medicines, days’ worth of food, families unable to do a load of washing or get any reprieve from cooling in the overwhelming heat.

Now, October 14 is a very important day for our country.

Important to ensure First Nations people have a voice in their future – no decision about them, without them.

Now, there are some who argue that First Peoples would be better off without a consultative mechanism enshrined in our constitution.

This is an argument I just don’t understand.

Those in this room will know we have real and tangible examples of where listening to First Nations voices to Government and Parliament have already made a difference.

In 2011 – when Labor consulted upon and then legislated the Carbon Credits (Carbon Farming Initiative) Act in 2011, the voices and ideas of First Nations Australians were heard and improved that legislation.

As a result of First Nations strong advocacy across the Parliament, native title rights to consent to projects were enshrined in the legislation.

While more needs to be done, the statutory consent right for native title holders and land rights land has enabled many First Nations peoples to have a say about projects on their land and helped a number financially benefit from projects on their land.

First Nations voices have made a difference in the ACCU scheme particularly with the 81 savanna fire management projects that have prevented over 12 million tonnes of emissions to date.

They have contributed to the new savanna method being developed, which is important to extend these opportunities.

So we know that including First Nations voices in the heart of decision making doesn’t just improve outcomes for those communities – it improves outcomes full stop.

But consultation shouldn’t be on an ad hoc basis.

First Nations people deserve to be acknowledged in our Constitution and their right to have a Voice to their Parliament should also be acknowledged.

CHUBB REVIEW

Your Conference theme today could well be the theme of climate change policy under our Government:

Reform, Repair and Race for 1.5°C – all at the same time.

Because there isn’t a minute to waste – including in carbon markets.

One of the first things we did in Government was to commission the Chubb Review – looking at the ACCU scheme in detail and testing the scheme to ensure it was robust and had the integrity we need in a carbon market.

Let me be clear, integrity in crediting real carbon abatement is essential.

The ACCU scheme must deliver real and additional abatement that contributes to our legislated emissions reduction targets under the Paris Agreement.

It is not a charity to reward landholders for good land management, but a scheme to drive activity that would not otherwise occur.

With our Safeguard Reforms having commenced on July 1, ACCUs are a key tool for industry in hard-to-abate sectors to contribute to the over 200 million tonnes of abatement required by the reforms to 2030.

The Chubb Review concluded that the scheme has the necessary integrity, but some important changes are needed to improve it.

But after ten years of operation, the need for reforms to ensure the scheme remains fit for purpose is hardly surprising.

And my Department is now consulting on the implementation of some of the key recommendations for scheme reform, with a consultation paper having been issued on August 25 and open for submissions until October 3.

While a number of options to improve the ACCU scheme were identified from 2015, the previous government for whatever reason never introduced them.

In line with the review recommendations, the Government has legislated that the Chair of the integrity committee be a full-time position.

I have now appointed Professor Karen Hussey as the inaugural full-time chair – a respected expert who will lead crucial ongoing oversight of integrity issues and test new proposals thoroughly.

Professor Hussey brings over 20 years’ experience in climate change economics, policy, regulation, and science including senior positions at the University of Queensland and most recently as Deputy Director-General at the Department of Environment and Science in the Queensland Government.

I look forward to her taking on this very important leadership role.

Of course, she is currently the Chair of ERAC.  She will continue as the full chair of the new Carbon Abatement Integrity Committee when the process of establishing it is complete.

Integrity must continue to be a strong focus of our reforms and the Clean Energy Regulator will continue its robust audit and compliance programs to ensure all projects meet scheme requirements, taking action where they do not.

Importantly, the Chubb Review also consulted First Nations voices, with a number of key recommendations to help improve outcomes for First Nations peoples.

It recommended the Integrity Committee include a First Nations representative, which I am currently progressing.

It also recommended improvements to scheme consent, so that native title holders should need to provide their consent to project registration, rather than only after the project has already started.

PROPONENT LED METHODS

Also in the discussion paper – a proposed model for the creation of new, proponent led methods.

The Chubb review recognised that it is no longer a fit for purpose model to have the minister of the day setting priorities for the development of new methods. I agree.

That is why we accepted the recommendation to develop a proponent led approach to method development.

We want a genuine discussion and assessment of this proposal, noting we need a system that is workable, timely and focused on creating methods with the highest levels of integrity.

To further assist proponents, my Department has just published interim guidance for people seeking to put forward new methods.

The better proponents can make their expressions of interest using this guidance, the quicker it will be to make high integrity methods that work and unlock innovative new abatement opportunities.

My Department has also made progress on the Integrated Farm and Land Management method that was already in development and will soon be sharing further materials for consultation as part of the codesign process.

It is important that the method is thoroughly tested against the integrity standards to ensure that it credits activity that is additional and is appropriately conservative in its calculations.

KYOTO CREDITS

So there’s a significant amount of work underway – but there’s also so much more to do.

The sector has survived a decade of Federal delay, denial and dysfunction.

One of the overhangs of that era is the carryover Kyoto credits –

A remnant of the climate wars, a symbol of the internal division which divided the previous government and dragged Australia back on the international stage.

They were never more than an accounting trick to try and make it look like we were on track to meet our commitments and targets.

Scott Morrison once said:

“…There has always been the option to have those carryover credits and they've been used in the past and if they're needed, it is the Government's policy to use them in the future.”

Now, they may have dropped out of the news cycle.

But they have been still very live on Australia’s books.

And while our Government has long-committed to never use them to achieve our emissions reduction goals there has been nothing preventing a future government from doing so.

And as we’ve seen in only the past week, with the Nationals fighting again about whether to abandon net zero, we can’t trust the Coalition to do the right thing if they were to get into government again, lured by dodgy accounting tricks rather than genuine abatement.

That’s why today, I am pleased to announce those carry over credits from the last decade, equalling more than 700 million tonnes –

Representing more than a year’s worth of national emissions –

Have now been permanently cancelled.

My colleague the Assistant Minister Jennifer McAllister has signed the instruction which cancels them. 

They are gone.

​Because we know that good climate and energy policy is good for the economy.

​So we’re getting there with measures that invest in our nation’s future competitiveness and growth.

​Like our landmark Safeguard Mechanism Reforms which will deliver over 200 million tonnes of emissions reduction by 2030 – the equivalent of taking two-thirds of Australia’s cars off the road.

​Like our $1.7 billion for our Energy Savings Package which will deliver energy upgrades for households, businesses and communities to save on energy, power bills and emissions.

​Like our $20 billion Rewiring the Nation Plan and our Capacity Investment Scheme, which will help unlock cleaner, cheaper, firmed renewable energy to reach 82% renewables by 2030.

​Our policies will remain directed at the urgent transformation of our economy to get to net zero, address dangerous climate change and drive emissions reductions across in every sector.

Net Zero Planning

Finally, I want to touch on the substantial work we will be undertaking over the next 12 months.

ACCUs and carbon markets are not an end in themselves, they are a climate policy tool to contribute to the emissions reductions we must deliver to urgently address climate change, alongside onsite abatement.

In July I announced the Government was developing six sectoral plans – underpinning the development of our 2035 target and forming part of a comprehensive plan to get to net zero by 2050.

This week the Parliament referred a request to the Climate Change Authority to provide advice to the government on the technology pathways for those six sectors.

This advice will inform our sectoral plans and help investors allocate their capital to the net zero transformation.

Many in this room remember the previous government’s empty net zero plan, a fantasy document based on wishful thinking and no input from the Climate Change Authority.

The fact is that each sector cannot continue business as usual and offset its way to net zero.

We need to drive emissions reductions at source and draw down carbon from the atmosphere to address the residual emissions of each sector. 

We cannot hope technology will solve for net zero, without the incentives, policies and programs to commercialise and deploy those technologies in Australia.

The role of carbon markets and our strategy for using carbon markets across the six sectors will be an important part of our net zero plan.

There will be heavy consultation in the development of each plan, and I certainly encourage CMI and everyone here to participate in the relevant consultations.

Our Safeguard Mechanism reforms already recognise the importance of reducing emissions at source, with new legislated ‘safeguard outcomes’ in the NGER Act that ensure the safeguard rules reduce overall onsite emissions over time and provide a material incentive for onsite abatement.

The Government has opened three streams of the Powering the Regions fund to help achieve this, with ARENA’s Industrial Transformation Stream scheduled for launch later this year.

Businesses know that reducing onsite emissions rather than offsetting is the most effective way of remaining competitive in a global net zero economy – after a decade of delay and denial, the Government is here to help them on this journey.

The emissions reduction path for each business, industry or activity is not linear.

Carbon markets play an essential role in providing flexibility for these businesses while new abatement technologies become available. They are the ‘net’ in ‘net zero’ for residual emissions which cannot be eliminated.

The CMI and everyone in this room have an important role to play to contribute to our policy development and make the achievement of net zero a reality.

I look forward to continuing the same level of engagement, consultation and strong dialogue with the CMI and your members as we have in the first year and a half in office.

We’ve done a lot.  But there is much, much more to do.  Let’s get on with it.