Committee Report: Transparency in Carbon Emissions Accounting

Published on Mon 31 August 2020 10:04am

On behalf of the Standing Committee on the Environment and Energy, I present the committee’s advisory report, incorporating dissenting reports, on the National Greenhouse and Energy Reporting Amendment (Transparency in Carbon Emissions Accounting) Bill 2020, together with minutes of the proceedings.

I am pleased to make some remarks upon the tabling of the committee’s report from the inquiry into the private member’s bill as described. At present, Australia’s system of greenhouse gas accounting and reporting is structured to be in compliance with agreements that flow from the United Nations Framework Convention on Climate Change. Within this system, participating nations are responsible for measuring and reporting certain emissions data, covering what are called scope 1 and scope 2 emissions. In Australia, that happens under the National Greenhouse and Energy Reporting scheme, the NGER scheme.

Contrary to the thrust or purpose of the bill under consideration, the Climate Change Authority, among others, persuasively argued that the collection reporting of scope 3 emissions should not be required at this stage under the NGER scheme. That doesn’t mean that the scope 3 emission is without value in the broad conversation about the global task of achieving emissions reduction in order to prevent catastrophic climate change; it’s just that there is no clear additional value and some clear redundancy in reporting scope 3 emissions under the current framework.

I’ll make three further brief points. Some inquiry participants pointed to the fact that, when claims are made in relation to the role that Australian coal and gas exports might play in reducing emissions in other countries, by virtue of the comparatively lower emissions intensity that is claimed for these fuels, any such assertion does depend on some form of scope 3 estimation. Labor members of the committee, namely me and the member for Macnamara, believe this could have been more strongly reflected in the report.

The second point is in relation to the fact that a number of Australian companies do currently disclose scope 3 emissions voluntarily. On that basis, it seems important to observe that doing so is clearly possible and affordable. When considering the evidence from the Department of Industry, Science, Energy and Resources that it couldn’t be sure about the rigour of these estimates, it seems there would be some value in undertaking a limited assessment of the method, cost and accuracy of such voluntary scope 3 disclosures.

Finally, some contributors to the inquiry raised concerns about the timing and regularity of National Greenhouse Gas Inventory reporting, and, specifically, the release of quarterly emissions data by the responsible minister. As an example, the Australasian Centre for Corporate Responsibility gave evidence as follows: ‘Needless to say, there will be a diminution of public trust and confidence where the action of ministers or the outcome of some other part of governmental process involves unnecessary delay, inconsistency, a lack of transparency and the release of information in circumstances where it is less likely to be noticed or attract attention and proper scrutiny.’ That is consonant with other evidence provided to the committee that building and maintaining public trust in Australia’s system of greenhouse gas accounting and reporting is vital, and it does appear there are improvements the government could consider. These matters are covered in the additional comments that I and the member for Macnamara provided as part of the inquiry report.

I thank all those who made submissions or gave evidence to the inquiry and acknowledge, as always, the work of the secretariat and my fellow committee members, particularly the chair, the member for Fairfax.

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