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The Hon. M.D. RANN (Minister for Sustainability and Climate Change) obtained leave and introduced a bill for an act to provide for measures to address climate change with a view to assisting to achieve a sustainable future for the state; to set targets to achieve a reduction in greenhouse gas emissions within the state; to promote the use of renewable sources of energy; to promote business and community understanding about issues surrounding climate change; to facilitate the early development of policies and programs to address climate change; and for other purposes. Read a first time.

The Hon. M.D. RANN: I move:

That this bill be now read a second time.

Today I am proud to introduce bold and historic legislation designed to tackle the single biggest threat facing our state and our planet: climate change. Can I say at the outset that I want to dedicate this legisla­tion to the inspiration over many years of Dr David Suzuki, and also to thank others, including Tim Flannery, Stephen Schneider, Paul Ehrlich and Tony Blair for their encourage­ment.

This legislation, the Climate Change and Greenhouse Emissions Reduction Bill 2006, reinforces South Australia's position as an exemplar to Australia and the rest of the world in the field of the environment. It lays down a series of ambitious yet vital goals for our state; goals backed by the weight of law. The bill breaks new ground on a number of fronts. For example, it is the first climate change legislation to be introduced in Australia, and only the third of its kind in the world, I am told, after California and the Canadian province of Alberta. Most importantly, the bill seeks to combat a phenomenon that I believe will strike Australia earlier and more severely than any other developed nation in the world; a phenomenon that many of us believe poses a greater threat to us all than even the grotesque threat of terrorism.

In order to place this bill in its proper context it is worth noting that its introduction is the culmination of four years of steady work and solid achievement by the South Australian Government. We have fostered the establishment and rapid growth of a thriving renewable energy sector such that South Australia is today the recognised national leader. For example, with less than 8 per cent of Australia's population, South Australia is home to 51 per cent of the nation's installed wind power capacity. We have gone from having no wind farms at all in 2002 to having six in 2006. When a further two wind farms are completed in 2007-08 including, I am told, the biggest ever to be built in Australia, the state's total investment in wind farms will exceed $1 billion.

More importantly, our current and planned wind farms will save 1.2 million tonnes of greenhouse gas emissions a year, which is the equivalent of taking almost 300 000 cars off our roads annually. Recently we began a trial of mini wind turbines on office buildings in Adelaide's CBD, including on my own building in Victoria Square, and I certainly want to keep pursuing this approach and to see more mini wind turbines installed across the rooftops of Adelaide and hopefully be able to foster a local production industry in this area.

South Australia is also a leader in solar energy, with our state having 45 per cent of the country's grid-connected solar power. We have placed solar panels on major public build­ings on North Terrace, such as the Art Gallery of South Australia, the South Australian Museum, the State Library and this parliament house, and soon we will install panels on Adelaide Airport. We are also in the process of installing solar panels on 250 public schools across the state as part of integrating environmental and conservation and sustainable energy into the science curricular, environment curricular and even the maths curricular. I must say it is terrific to go into schools and see often primary school children explaining how much power the solar panels on the roofs of their classrooms are producing.

Finally in renewable energy, South Australia accounts for about 90 per cent of the national effort now being put into the more experimental field of geothermal or hot rock energy. South Australia has this country's first Minister for Sustain­ability and Climate Change; a role I was proud to take on myself after the March state elections. We have introduced a number of energy and water-saving measures for the construction of new homes, including the mandating from July of this year of a five-star energy rating for all new homes and plumbed rainwater tanks for all new homes. We are also supporting the use of gas or solar water heaters in all new homes by introducing tough new greenhouse performance standards for hot water systems. We are planting 3 million trees across Adelaide as part of a network of urban forest, and millions more will be planted as part of the River Murray forest initiative, and we are increasingly using alternative fuels in State Government cars, and bio-fuels in computer buses and trains.

In order to demonstrate leadership and to put our money where our mouth is, I recently committed the government to buying 20 per cent of its energy needs from certified green power sources by 1 January 2008. At present the highest jurisdiction is Victoria, with 10 per cent. Today I am urging businesses and local councils in South Australia to match the state government's 20 per cent commitment.

At the national level the state government has been promoting a national mandatory reporting scheme for greenhouse gas emissions. We are also proposing the establishment of a national emissions trading scheme, and if the commonwealth will not embrace it we will go it alone with the other states. This scheme is basically a marketed-based tool using industry caps and the issuing and trading of permits by companies designed to cut greenhouse gas emissions. The government is also encouraging the construc­tion of energy and water efficient buildings in Adelaide's CBD. In line with this I was pleased to announce last month that South Australia's first council-approved six-star green star building, which is now starting to take shape in Victoria Square, will soon be the home of SA Water.

South Australia's practical efforts in relation to climate change have drawn endorsements from a number of inter­national experts and campaigners on the environment. In September when he was touring Australia the former Vice President of the United States, Al Gore, commended South Australia `for in many ways leading the world with visionary proposals to really do the right thing. And I congratulate you and your leadership for what you are doing, and I just wish the rest of the world, including my own country, was doing a lot of the things you now have in prospect there', Vice President Gore said. The Canadian environmentalist, broadcaster and author David Suzuki described the state government as `among the most progressive' in the world, particularly for enshrining greenhouse gas emission targets in legislation as we are doing through this bill.

Also, in September, the former leader of the Soviet Union, and now Chairman of Green Cross International, Mikhail Gorbachev, wrote to me and welcomed the proposal to introduce this bill. Again, I want to quote directly. He stated:

South Australia should be proud of the strong leadership role it is taking in the fight against climate change in Australia and globally.

This legislation also has the support of the Prime Minister of Great Britain, Tony Blair, who told me the following in a letter:

I applaud your leadership on climate change and the goals you have set in your new bill.

Although the state government is very proud of this legisla­tion, we remain deeply disappointed that it is not part of a concerted and necessary national action on climate change. We in South Australia may be taking the lead in relation to many aspects of climate change policy but, sadly, Australia as a country is still lagging behind other parts of the world.

The Prime Minister, Mr Howard, recently had a `road to Damascus' moment announcing the establishment of a special working party to develop a carbon trading scheme for Australia. I must say this caught all of us by surprise, given the ferocity of his attack on me and other premiers when, just a few months ago, at Bondi Beach, John Thwaites, the Deputy Premier of Victoria, Maurice Iemma, the Premier of New South Wales, and I released a discussion paper on setting up a carbon trading scheme for the states. Neverthe­less, I believe that the federal government is continuing to bury its head in the sand on the issue of climate change, especially by refusing to ratify the Kyoto Protocol.

In the absence of genuine leadership at the federal level, states such as South Australia are acting in order to respond to and truly anticipate the effects of climate change. Obvious­ly, through the COAG process and elsewhere, we will continue to call on the federal government to do the right thing by not only setting up a carbon trading scheme but also extending the MRET scheme.

For decades now the world has been given regular warnings about the deteriorating health of our plan­et—warnings that we have largely ignored. Still, evidence of climate change continues to mount, and the imperative for action is becoming clearer and more urgent by the day. In South Australia, 2005 was the warmest year since reliable records began in 1910. The most recent winter was our driest on record, prompting level 3 water restrictions from 1 January 2007. In October, the Murray-Darling Basin received its lowest monthly inflow on record, just 74 gigalitres, when the average October inflow is 1 100 gigalitres.

A recent CSIRO report tells us that, over the next 20 to 50 years, South Australia can expect higher temperatures, lower rainfall and an increase in the incidence of fires and drought. What is even more concerning is that these trends are occurring faster than the previously thought. I fear that South Australia's record low winter rains in 2006, the current devastating drought and record low inflows of water into the River Murray together represent a frightening glimpse of the future under the effects of climate change.

At the global level, the recent release of the Stern review by Sir Nicholas Stern, former chief economist to the World Bank, has attracted worldwide attention, primarily because it is the first report by someone of high international regard that puts the issue of climate change firmly on the economic agenda, not just the environmental agenda. In his report, Sir Nicholas describes climate change as the greatest market failure the world has seen. Sir Nicholas's key message is that action to reduce climate change is pro-economic, that the costs of climate change to the global economy are likely to be far higher than the costs of reducing emissions. Clearly, our window of opportunity for action is within the next 10 to 20 years. The Stern review tells us that failing to act on climate change could cost 5 per cent of global GDP each year from now on, and the costs could be more than 20 per cent of GDP if non-market issues, such as impacts on health, are considered.

In the state, national and global context which I have just outlined, today I am proud to introduce the Climate Change and Greenhouse Emissions Reduction Bill 2006. This legislation will position our state to take early action to reduce greenhouse gas emissions and to adapt the inevitable impacts of climate change. The Labor Party went to the March state election promising to introduce climate change legislation that would set a target for cutting greenhouse emissions by 60 per cent of 1990 levels by 2050; require a report to parliament on the issue of climate change; and establish a voluntary carbon offset program for business and government.

However, the legislation being introduced today goes further—as it must—as the evidence of the impact of climate change mounts. The international debate on climate change is moving rapidly, and it is essential that South Australia stays ahead of the pack rather than lag behind. South Australia is by world standards a small jurisdiction, but this bill will demonstrate that we are an `early mover' on climate change and, I hope, encourage other jurisdictions to follow suit. The overarching objective of the legislation is to set in place measures that will contribute to a more sustainable future for South Australia. It will do this by setting targets; promoting a commitment to action, including setting sector specific and interim targets; promoting business and community consultation; positioning us to rapidly take up new initiatives as they emerge; and keeping us accountable for progress through regular reporting.

Climate change is an issue for the whole community, not just for government. A total of 142 submissions and 36 letters of support were received during the public consultation on this legislation. As a result of the comments raised by business and community groups, I have made a number of important additions to the objectives of the bill. One of the new objectives relates to adaptation to climate change. The development of strategies that will allow us to adapt success­fully to these changes will play a vital role in South Australia's response to climate change, alongside measures to reduce and mitigate emissions. To this end, a new objective to support measures to facilitate adaptation to the inevitable impacts of climate change has been included in the legisla­tion. This recognises the need to improve the community's capacity to deal with global warming, especially its impact upon biodiversity, natural resources and eco­systems.

A second new objective is to encourage energy efficiency and conservation as a measure to reduce emissions. This is consistent with government policy and recent initiatives in this area, including the requirement for all new homes built in South Australia to have a five-star energy efficiency rating and the reduction in the government's own energy consump­tion as a consequence of the Government Energy Efficiency Action Plan. The final new objective is to promote research and development and the use of technology in order to reduce or limit emissions, or to support adaptation to climate change. This will support existing initiatives, such as the establish­ment of the Chair of Climate Change at Adelaide University (which the state government is very pleased to support financially), and will give South Australia a competitive advantage by developing cutting edge solutions.

Other major changes to be made as a result of the consultation process on this bill include:

×an increase in the frequency of reporting on progress from every four years to every two years;

×provision for the minister to set a target and interim targets for emissions by South Australian government agencies and instrumentalities;

×a requirement for sector agreements to be independently verified under the auspices of the Premier's Climate Change Council; and

×a requirement for the minister to support initiatives to develop a scheme to promote the generation of renewable energy in the state.

The Climate Change and Greenhouse Emissions Reduction Bill 2006 establishes three targets: first, to reduce by 31 December 2050 greenhouse gas emissions within the state by at least 60 per cent of 1990 levels; secondly, to increase the proportion of renewable electricity generated so that it comprises at least 20 per cent of electricity generated in the state by 31 December 2014; and to increase the proportion of renewable energy consumed so that it comprises at least 20 per cent of electricity consumed in the state by 31 Decem­ber 2014. So, the generation target and the consumption target are both 20 per cent.

As I said at the beginning, South Australia will be the first government in Australia, and one of only a few international­ly, to legislate for realising targets to reduce greenhouse emissions. The United Kingdom has also indicated its intention to legislate for an emissions reduction target. I understand that that was in the Queen's Speech at the recent opening of the United Kingdom parliament. South Australia's setting of a long-term target to 2050 emphasises the need to make significant changes to the economy and the way we live if we are to make effective reductions in emissions. This target will be relevant to all government policy and strategy, and it will be a key determinant in economic, social and environmental decision making.

The legislation is based on three principles. The first principle is that the government will work collaboratively with business and the community in order to achieve the bill's targets. We want this legislation above all to be positive and workable—a goal that is very much based on my belief that, if you want to bring about profound and lasting change, it is always better to bring people along, rather than compelling or punishing them. The second principle is that the govern­ment is committed to realising the targets without compro­mising our economic development, environmental sustain­ability and social justice objectives. The third principle is that the legislation should provide for a flexible, adaptable and responsive approach to managing climate change.

National and international climate change policy is evolving at a rapid pace, so a flexible framework will allow South Australia to respond quickly and effectively, providing us with a strong competitive advantage and keeping us ahead of the game. In terms of collaboration, the legislation commits the government to working with business and the community to develop plans, policies and sector-specific and interim targets that will put us on the path towards achieving the headline targets. Working with the community is also important to ensure that greenhouse reductions go hand in hand with economic development and community wellbeing (the second principle of the legislation).

To this end, the Premier's Climate Change Council will be established to provide the government with an independent stream of advice on the impact of climate change on business and the wider community and on the effectiveness of policy responses. The council will have a role in disseminating advice to business and the community, including encourage­ment for the adoption of leading-edge practices. It will identify opportunities to reduce or eliminate red tape created by responses to climate change. The council will consist of between seven and nine members with expertise and interests representative of the South Australian community, including state and local government, business, science and the wider South Australian public. Members will be appointed for a period of three years.

An additional element of consultation is the requirement to prepare regular reports on the effectiveness of the legisla­tion. Following public consultation, the frequency of reporting progress against the targets has been increased from four yearly to two yearly. The reports will outline progress towards achieving targets, including any interim or sectoral targets; new policy development, such as sectoral agreements entered into and voluntary offsets achieved; and any national or international commitments or agreements that have been entered into. The first such report will be prepared in 2010. It is important that we keep a careful eye on progress and, to this end, it will be vital that we have the systems and processes in place to provide us with high-quality data and information that will inform this progress and any new policy developments that arise as a consequence.

The state government is hoping to lead the preparation of a new national approach to greenhouse gas emissions reporting that will be comprehensive yet streamlined and economically efficient. In support of this and in line with the commitment made at the March state election, the government is consider­ing measures that will require greenhouse gas emissions assess­ments for all major projects. Indeed, cabinet on Monday approved an interagency inquiry into such measures with a view to cabinet considering recommendations early next year.

The plan may result in proponents of major projects being required as part of the approval process to report on the following: that risks of climate change and changing energy markets have been adequately analysed and addressed; whether all sources and levels of greenhouse gas emissions to be generated from the proposal have been identified; and that the methods to minimise emissions have been identified. This may include disclosing how opportunities for renewable energy, low emission technologies and energy efficient options have been analysed.

The third principle of the legislation is its flexibility. It seeks to provide an over-arching policy framework with operational aspects resting with other statutes and programs. This policy framework will be consistent with national and international developments, and its flexibility will allow for the implementation of state, national and international policies as they emerge. This flexible approach is intended to apply not only to policy responses but to new opportunities for the state. To this end, the legislation foreshadows the development of an industry plan for the state's renewable energy technologies industry.

As mentioned earlier, South Australia continues to host the highest proportion of renewable energy generation in all mainland jurisdictions. The renewable energy targets will support further development of both centralised and distribut­ed renewable energy. The legislation provides for the minister to promote the use of distributed renewable electricity in the state and, flowing from this, the government recently announced that it has started preparing Australia's first feed-in legislation which will provide householders with up to twice the standard retail price for surplus power they feed back into the grid rather than the current dollar-for-dollar return.

The government is consulting with energy retailers, regulators and distributors, as well as the community, about the new legislation. Similar feed-in measures have been introduced into 16 European states and another seven countries outside of Europe, including Canada, China and Israel. The renewable energy industry will be supported further by the government's decision to source 20 per cent of its energy needs from certified green power sources from 1 January 2008 at the latest, and I should say that I hope to have that contract signed and sealed long before that.

The legislation will also support industry by providing the opportunity to publicly register its involvement in voluntary offset programs in a way similar to that already established by climate change legislation in California, under its governor, Arnold Schwarzenegger. The legislation provides for the establishment of voluntary sector agreements between the minister and organisations, individuals or specific sectors.

Sector agreements will provide the basis for organisations to develop and commit to actions and strategies to address the objectives of the legislation and they will demonstrate serious intent to address climate change. Agreements will include actions to reduce emissions, adapt to climate change, develop appropriate technologies, reduce energy use and increase the use of renewable energy.

A register of all those who enter into a sector agreement will be established and be subject to public inspection. Due to their voluntary nature, there will be no sanctions for non-performance, and prior action to reduce emissions will be acknowledged. Emissions trading is now regarded as part of the climate change solution following lobbying by this state, New South Wales and Victoria for national discussion and debate on this issue.

A national blueprint for state-based emissions trading by the energy industry (which represents Australia's largest and fastest growing source of greenhouse gasses) has been released for public comment. Consistent with its flexible nature, the legislation includes specific provisions for the introduction of emissions trading in concert with other jurisdictions. In the absence of strong national leadership, South Australia has stepped up to take a leadership position.

In addition to lobbying for emissions trading, in 2005 I was successful in getting climate change placed on the agenda of the Council of Australian Governments. This led to the release of the COAG national plan of action on climate change. The COAG Climate Change Group has been set up to progress the action plan. I have also been able to reach agreement that the issue of climate change will be firmly on the agenda of the next COAG meeting.

The national approach to addressing climate change is largely based on technological solutions, such as clean coal, renewable energy, low emissions technologies and nuclear energy. South Australia's view is that, rather than focusing on one solution, a mix of complementary measures is required that can be delivered through a range of policy instruments, including market mechanisms, public education advocacy, legislation, regulation and new programs. We have already made considerable progress in this regard.

In tackling climate change, South Australia's Greenhouse Strategy is the state's plan of action for climate change, and it is scheduled to be released soon. It sets goals and objectives for a five-year plan of action for a government that will deliver the targets and policy measures outlined in the legislation.

South Australia's Strategic Plan commits South Australia to a range of greenhouse and energy efficiency targets, including the targets specified in this legislation. During public consultation on this bill, a number of groups called for the legislation to be strengthened through the inclusion of more mandatory measures to compel behaviours. However, the overall intent of the legislation will continue to focus on voluntary measures and collaboration to achieve change. One of South Australia's strengths is the close relationship between government and industry. Our aim is to reach our targets working with industry, not just by imposing new rules. It is the case that minimum standards need to be prescribed. This government believes that sufficient legislative force to achieve these standards exists already in other legislation such as the Environment Protection Act, the Development Act and the Mining Act.

The emphasis in this bill is to achieve progress through government and industry working together. The legislation provides for a review after four years to provide an objective assessment of the results of this approach. Consideration will be given to mandating behaviours and outcomes at that time in areas where further progress is required and where the climate change legislation is needed to cover any gaps in the other legislation as referred to previously. While the emphasis of the legislation remains on voluntary measures, the government has set itself compelling measures to demonstrate its leadership and commitment to take purposeful action.

The Climate Change and Greenhouse Emissions Reduc­tion Bill 2006 is a considered, comprehen­sive and balanced piece of legislation. It seeks to bring about practical change for the better, to maintain South Australia's national and international leadership in relation to climate change and to secure the long-term prosperity of our state. For some people this bill will not go far enough, for others it will go too far, but I believe it boldly speaks to one proposition on which we can all agree, and that is that doing nothing on climate change is neither a reasonable nor responsible option in 2006. I commend this bill to the house.

Mr HAMILTON-SMITH secured the adjournment of the debate.