Interview with Patricia Karvelas, ABC Radio National

PATRICIA KARVELAS: Last year, the new Labor Government vowed the climate wars would end. Soon after, they legislated their 2030 emissions reduction targets with the support of the Greens. But the bill that’s arguably more crucial, more important, outlining how certain industries will get to that target is driving a new wedge between the government and the minor party with an outcome still unclear. There is yet to be a deal.

Energy and Climate Change Minister Chris Bowen joins me now. Minister, welcome back to Breakfast.

CHRIS BOWEN: Always a pleasure, PK. Good morning and good morning to everyone listening.

PATRICIA KARVELAS: Last night, a Senate Committee released its recommendations for the mechanism, but the Liberal and the Greens issued dissenting reports. Now, the Greens say the safeguard mechanism will increase pollution from coal and gas and make climate change worse. They are the votes you need and they say your bill makes it worse. How are you going to get it through?

CHRIS BOWEN: Well, you’re right, Patricia. The Liberals have made themselves irrelevant to this process by opposing a policy they themselves promised they would implement – i.e. safeguard crediting. But put to that one side because that’s the modus operandi of Peter Dutton.

In relation to the Greens, obviously, we’ve had ongoing discussions and we’ll have ongoing discussions, but our position is the same in private as it is in public, and indeed Mr Bandt’s is to be fair. Our position is we sought a mandate to implement these reforms. This is really important, and these ongoing discussions are important because the opportunity before the Parliament over the coming weeks is either to seize the opportunity to reduce emissions by 205 million tonnes or to squander it. That’s what the Parliament has the opportunity to decide in coming weeks.

Now, I’m confident that the Parliament will seize that opportunity because the stakes are too high. This is almost a third of our emissions – 205 million tonnes of emissions reductions by 2030. Yes, of course, when you’re doing a big complicated reform, Patricia, the Liberals will say this is a disaster, the Greens will say it doesn’t go far enough. But our track record in government under Anthony’s leadership and the way we intend to proceed with this is to get the job done!

PATRICIA KARVELAS: Okay, but why let them buy carbon credits without any limits?

CHRIS BOWEN: Well, because, Patricia, what we’re doing is, as I said, a large and complicated reform process which covers a lot of different industries – 215 different facilities, 84 of which are fossil fuel facilities, but many are different types of facilities with varying degrees of capability at the moment to reduce their emissions on site. Take cement, for example. It’s complicated and difficult to reduce emissions without reducing production or reducing staff. So, we don’t want that to happen so we do need to provide some flexibility, because we’re applying – 

PATRICIA KARVELAS: But this is unlimited flexibility.

CHRIS BOWEN: We’re requiring, Patricia, 4.9 per cent reduction in emissions each year. That does require some flexibility. But what we are doing is providing that incentive and that certainty for firms to make the investments in on site abatement, some of which will be available now for some of the facilities, some of which will take some years to develop, but they need to invest in it now. And the framework we’re providing provides that real incentive for those firms to really get serious about on site abatement. But it does necessarily provide that flexibility as to how they’ll do it, particularly in the shorter term as we’re waiting for that technology, whether it be in cement or steel or other things to come on.

PATRICIA KARVELAS: Okay, last time we spoke I asked you a question and a lot of my listeners were concerned that you didn’t answer it, so I’m going to ask it again in this interview. It’s like an ongoing conversation we’re having. Why do we need new coal and gas?

CHRIS BOWEN: Well, what we need is a sensible – saying “no new coal and gas” is, frankly, a slogan, not a policy. What we need is a sensible transition to a much more renewable economy. So let’s just take the National Energy Grid for example, and then I’ll deal with manufacturing. But the National Energy Grid, Patricia, we’re going to get it to 82 per cent renewable by 2030. That’s 82 months away. It’s a huge task, a big lift. It’ll still mean that of the 82 per cent renewable, 18 per cent will be non renewable. That means you’ve got to have supply. You’ve got to have the supply – 

PATRICIA KARVELAS: Okay, but why do we need new coal and gas? 

CHRIS BOWEN: – of the non renewables.

PATRICIA KARVELAS: – was the key question.

CHRIS BOWEN: You’ve got gas fields, you know, with reducing production in the southern states, for example. We need to ensure that the gas fired power stations have supply and that’s before we even get to manufacturing for which green hydrogen will step forward and I’m very confident will replace natural gas, but it’s not there yet and it’s several years away. So we’ve got to get this transition right. It’s all very well, with due respect to the Greens, for them to say, “We want this and we want that.”  Our job is to manage this transition – 

PATRICIA KARVELAS: I get that but I’m going to politely interrupt – 
 
CHRIS BOWEN: – the fastest, the most complicated transition and to keep – 

PATRICIA KARVELAS: – but why new supply, though? Why isn’t what we have – 

CHRIS BOWEN: I think I’ve just – 

PATRICIA KARVELAS: No, I don’t feel like you have with – 

CHRIS BOWEN: Well, you’ve got examples of – 

PATRICIA KARVELAS: – respect. I don’t get it.

CHRIS BOWEN: Well, with respect, Patricia, you’ve got the ACCC, AEMO pointing to gas shortages at various points. Yes, we’ve got to manage the export market. A lot of this has already been contracted. You can’t disturb that. You’ve also got to manage the ADGSM, the gas Code of Conduct. All that we have in place. All that we have in place.

PATRICIA KARVELAS: So, we’re going to need new gas supply, you’re saying?

CHRIS BOWEN: Well, what I’m say something that it would be irresponsible – 

PATRICIA KARVELAS: To guarantee supply.

CHRIS BOWEN: It would be irresponsible, Patricia – let me make it very clear, as the Prime Minister’s saying in a speech this morning: gas has a role to play for peaking and firming for many years to come. It would be irresponsible to put some sort of blanket ban on as we are undertaking this massive transition, coming after 10 years of denial and delay, starting in 2022 to get a 2030 target. Yes, it’s ambitious and difficult and complicated.

PATRICIA KARVELAS: So, you’re – 

CHRIS BOWEN: We will do it.

PATRICIA KARVELAS: Okay.

CHRIS BOWEN: We will do it but we need – 

PATRICIA KARVELAS: So, let me just get to the heart of this, because last night I watched Chris Bowen speaking with my colleague Sarah Ferguson on 7.30 -

CHRIS BOWEN: I think you’ll find it was Adam Bandt.

PATRICIA KARVELAS: Chris Bowen – you’re Chris Bowen, of course.

CHRIS BOWEN: I’m the other guy.

PATRICIA KARVELAS: Yes, that’s an embarrassing misspeak. You’ve caught me.

CHRIS BOWEN: No, no.

PATRICIA KARVELAS: But I’ve still got the question and this is it.

CHRIS BOWEN: Correct. All good.

PATRICIA KARVELAS: Right. And he says: you’ve just changed the laws to ensure there’s enough supply, so why do you need new supply. Don’t we have enough gas?

CHRIS BOWEN: Well, that’s, with respect, that’s not quite right. What we did was put a gas supply – or a gas price cap on in December, with the support of the Greens and the cross bench, which we acknowledge and appreciate. No support from the opposition. But it does not provide an opportunity for the Parliament or the government to go in and cancel export contracts and nor should it. There’d be constitutional issues, there’d be sovereign risk issues, there’d be trade issues. What we’ve got to do is, I’m very keen to ensure that we have as much domestic gas supply as is necessary and possible, of course. That means we have to have difficult conversations with gas companies, which we’ve had, about the Code of Conduct, about ADGSM and the trigger.

PATRICIA KARVELAS: But you’re saying we’re going to need more gas?

CHRIS BOWEN: I’m saying that it would be irresponsible to have a blanket ban on – of the nature of which the Greens have indicated – 

PATRICIA KARVELAS: Because you think that we might need to – 

CHRIS BOWEN: – is their suggestion, is their offer – 

PATRICIA KARVELAS: – green light more gas.

CHRIS BOWEN: I’m suggesting, Patricia – I’ve said it now, I think, six or seven times – it would be irresponsible to have a blanket ban. I’ve said that consistently from the beginning. That has been our position in the private conversation with Bandt. It’s been our position publicly. And Bandt’s position has been the same privately as publicly. That’s their view. But it’s an offer not an ultimatum. He’s happy to have good faith talks. The we’ve had those, and we’ll continue to have them.

PATRICIA KARVELAS: Okay. Major Australian investment groups have told the Australian newspaper they’ll be recommending three changes to increase integrity in the scheme that you’re trying to legislate by forcing heavy emitters to release time bound climate transition plans. Do you think that’s a good recommendation and will you take it on?

CHRIS BOWEN: I certainly think, Patricia, that the conversation about transparency and openness and plans which are there for all to see is a very fruitful conversation to have. I certainly think that. I think it’s a suggestion by those groups which is worthy of further discussion and consideration. It has been something which has been on my mind about how we could improve the transparency of the arrangements and, certainly, they are the sorts of things that I think sensible people would and could contemplate.

PATRICIA KARVELAS: How confident are you that the pipeline of new coal and gas projects won’t blow out the emissions budget in your safeguard mechanism legislation?

CHRIS BOWEN: When you talk about just, firstly, Patricia, this concept of a pipeline. Now Mr Bandt, with respect, says, “Oh, well, there’s a pipeline of projects that Labor wans to approve.” Now, that is not the case. What there is is a register of projects which companies have, you know, filled in and said, “One day we might want to develop this” or “we’re interested in developing this.” Many of them are yet to get environmental approvals, final investment decision, board approval, insurance, finance et cetera. And, increasingly, shareholders, investors, consumers are demanding better of companies, and that’s a good thing. So, this idea that there’s a guaranteed pipeline is not accurate or correct and then, indeed, they have to get environmental approvals and then comply with the safeguards mechanism if they are large emitters.

Now, in relation to this, we’ve factored into our plans a reserve of 17 million tonnes to cater for the flexibility we need. But also, Patricia, if this reform passes, there’ll be a constraint on carbon of existing facilities and new facilities. If this reform does not pass, there’ll be no constraint, no constraint. So, again, the choice for the Parliament is: do you want business as usual, which is seeing emissions from these facilities go up, existing and new go up, or do you want a constraint in place which this policy provides which will see emissions come down? 

PATRICIA KARVELAS: But if you want to get your legislation through, you have to negotiate it. Now, yesterday Independent Senator David Pocock told me he’s still got serious concerns over the legislation. He’d like to see a cap on how many carbon credits a company can buy or use. Earlier you told me you thought that you needed flexibility. That means you could still have a cap with some flexibility. Will you consider that?

CHRIS BOWEN: Well, I’ve had discussions with Senator Pocock and will have more. But without revealing those private discussions, again, my position publicly is the same as it is privately, that if you put hard caps on ACCUs, when you are requiring 4.9 per cent emissions reduction each and every year, then that is a problem because you’ve got industries which won’t be able to comply with that without accessing ACCUs.

Now, people say you can’t offset your way to net zero and you can’t offset your way to the 1.5 degrees, and I agree with that. But I also think it is impossible to do it without offsets. I mean, offsets are the “net” in net zero. I mean, we all talk about net zero. Technically it’s the policy of all the parties – Labor, Liberal, Nationals and Greens.

PATRICIA KARVELAS: Yeah, it’s about the unlimited nature of the offsets.

CHRIS BOWEN: But “net” is the net in net zero. I mean, let’s just be – offsets are the “net” in net zero, so let’s be clear about that and they do have a role to play. Now, again, if you are going to suggest that no facility should be able to use more than x percentage of offsets, then you have to explain, with respect, how an industry which doesn’t have the technology readily available in large amounts just yet – whether it be concrete or steel or some of the others –  would be required to reduce their emissions. And, with respect, nobody has been able to do that because nobody can.

PATRICIA KARVELAS: Minister, finally, the Greens leader, Adam Bandt – that’s his name – has made it –

CHRIS BOWEN: Only our mothers can tell us apart actually.

PATRICIA KARVELAS: Well – has said you’re going to have to give a little. I mean, that’s the thing. You’ve got to do a deal if you want to get this through. What are you giving? It seems like every time we speak, you sort of – you are spruiking your plan, but what are you willing to negotiate on?

CHRIS BOWEN: Well, Patricia, with respect, you’re one of Australia’s finest journalists, but you’re not a mediator and we don’t need a mediator. Mr Bandt and I are having those discussions and they have been good faith discussions and with goodwill, just as Mr Brandt and I negotiated the climate bill, the electric vehicle tax cut and with the Prime Minister’s involvement, the energy relief package. I mean, we get things done and, yes, we start from different positions, but, of course, our track record – 

PATRICIA KARVELAS: So are you going to give a little?

CHRIS BOWEN: Well, well, I’m very keen to get this through, but our negotiating mandate is very clear and, as I’ve said a number of times in this interview, it’s the same in public as it is in private. Mr Bandt’s is the same in public as it is in private. He said his position is an offer not an ultimatum. I appreciate and respect that. I think that’s the right approach on his behalf, and we’ll have ongoing discussions. But, as I said, the opportunity for the Parliament is to seize or squander this chance to get emissions down by 205 million tonnes. This is the only opportunity we have to get emissions down in our largest industrial emitters. The country has been getting emissions down from electricity. We have plans to get it down much further. We’ve plans on transport. We are working on agriculture. But this is the big opportunity when it comes to heavy industry, which is almost a third of our emissions, and if we don’t seize this opportunity, we will not be on track to do the sorts of things that we can do as a country and catch up on 10 years of denial and delay.

PATRICIA KARVELAS: Minister, thanks for your time.

CHRIS BOWEN: Always a pleasure, PK.

PATRICIA KARVELAS: Climate change and Energy Minister, Chris Bowen. You’re listening to ABC RN Breakfast.