Parliament Updates

Zali Steggall MP speaks on National Greenhouse and Energy Reporting Amendment (Transparency in Carbon Emissions Accounting) Bill 2020

2 September, 2020


First of all, I commend the Chair of the Environment and Energy Committee, Mr Ted O'Brien MP, for conducting this inquiry in the quite exceptional circumstances caused by COVID-19. I also thank the member for Clark, my colleague on the crossbench Mr Andrew Wilkie MP, for introducing the National Greenhouse and Energy Reporting Amendment (Transparency in Carbon Emissions Accounting) Bill 2020 and enabling a very important debate. The bill seeks to amend the National Greenhouse and Energy Reporting Act 2007 to ensure transparency and accountability in the way the Australian government reports carbon emissions. To achieve this aim, the bill amends the reporting requirements of greenhouse gas emissions to include scope 3 emissions, which are the indirect greenhouse gas emissions arising as a consequence of the activities of a facility, and requires the minister to table Australia's national greenhouse gas emissions inventory estimates in parliament every three months.

Although I declined to dissent from the report on this bill, I will make some general comments on the bill. I support many of the remarks that were made in the committee's advisory report. I agree that, at this time, measuring scope 3 emissions is likely to be costly and complicated and may result in inaccurate estimates. However, given the value shown by some evidence presented to the committee, there should be further consideration of the bill and measurement of scope 3 emissions in general as circumstances and methodologies evolve.

The committee learnt that scope 3 emissions are significant in general because in some cases at a company level scope 3 emissions dwarf scope 1 and 2 emissions by up to 40 times. Evidence presented to the committee estimated that, at a country level, scope 3 emissions associated with Australian fossil fuel exports could be up to five per cent of global emissions.

Various inquiry participants provided evidence that measuring scope 3 emissions is a growing practice in top Australian companies. The fact that Australian companies are measuring emissions means that it is a material consideration in their business operations, in their decision-making and for their shareholders and must, therefore, be of inherent value. Indeed, we can look at the news and see weekly reporting on companies being compelled by their shareholders to disclose scope 3 emissions or sign onto climate targets, including on scope 3 emissions.

We see climate risk becoming a material consideration for directors in exercising their duties. This will include some consideration of scope 3 emissions. We also see scope emissions being factored into planning decisions on major projects. So clearly scope 3 emissions need to be dealt with and a plan needs to be developed. By creating uniformity in the measurement of scope 3 emissions we can be ahead of the trend and provide investors, shareholders, communities and businesses with certainty in a transition economy.

The committee also heard evidence from individuals and stakeholder groups as to the value of scope 3 for informing the public. I agree that the public should know the true extent of Australia's impact on global emissions. Without knowing, the public cannot make an informed choice at elections and for what to advocate. I expect demand for this knowledge will grow as society becomes more and more concerned with climate impacts. It flies in the face of the frequently asserted position by the coalition that, being only 1.3 per cent of global emissions, we can't possibly be expected to take action. What this ignores is that, on a per capita basis, we are one of the highest emitters. As a result, we do bear a responsibility for what our scope 3 emissions are overseas as a result of our export industries. I accept that, for the moment, the IPCC has not included a scope 3 or a standardised methodology for assessing that. Inquiry participants stressed the importance of measuring scope 3 emissions, particularly in respect to the transition to a net-zero economy—something that I strongly advocate for. I agree that we do need to know how reliant we are on fossil fuels in order to plan for a transition. We must also understand how exposed Australian exports are. As other countries commit and transition to a net-zero economy, we need to be able to pivot accordingly.

The second portion of the bill would compel the minister to table the quarterly greenhouse gas estimates in the House 15 days after publication and that the release of the data is handed to the regulator, resting formally under the department. On this aspect, the committee received evidence that the release of the estimates happened, on average, 46 days after they are currently required to be released. This is unacceptable, and I would call on the minister and the government to fix this as soon as possible. This is important information that the public should have access to in a timely way, as stipulated by legislation. It's essential that the public remain informed as to Australia's emissions and progress towards the Paris targets. Climate change policy and data are too important to be politicised. Therefore, I support measures in the second portion of the bill, which would hand the coordination of the data to a clean energy regulator.

Lastly, this inquiry was conducted under a very compressed time frame, and very limited evidence was able to be heard by the committee. With only one public hearing and a handful of submissions, the Australian public would be much better served with a more thorough investigation of this matter. We all know our emissions, whether they be domestic or international, are an issue that needs to be addressed. We need to find ways of making sure they are properly accounted for and published and make sure the Australian public is properly informed. To this end, I will be presenting to parliament later this year, in November, the climate change bill, which will in fact address this reporting framework and the delays we currently have in the system and will establish a sound legislative framework to ensure we have proper reporting, proper risk assessment, proper adaptation and resilience plans and, most importantly, proper mitigation to ensure we get to net zero.