MATTERS OF URGENCY
Senator DEAN SMITH (Western Australia) (17:42): This is a debate about uncertainty—uncertainty in the context of scope 3 emissions. Legal uncertainty leads to investment uncertainty. Investment uncertainty delays mining and resource projects.
Delayed mining and resource projects mean fewer jobs, less regional investment and less revenue to governments. The decision around scope 3 emissions requires more certainty, not less, and this is particularly important for a state like Western Australia. This afternoon's debate is not abstract and just about accounting conventions.
It's about jobs, investment, exports and the economic future of a state like Western Australia. The High Court's decision on the Mount Pleasant coalmine should ring alarm bells across every resources boardroom in Western Australia. Why?
It's because Labor governments, federal and state, cannot be trusted. The court found the New South Wales planning authority was required to consider conditions to minimise greenhouse gas emissions, including scope 3 emissions. That means emissions generated not at the mine, not necessarily in Australia and not by the company but potentially thousands of kilometres away, where an exported commodity is ultimately used.
That principle should be deeply concerning, which is why it has raised alarm across this country, and especially concerning to a state like Western Australia. As has been said by me in this place before, Western Australia is the engine room of the Australian economy. More than 136,000 full-time-equivalent jobs are directly supported by mining, with another 11,000 people directly employed in oil and gas extraction.
Mining and petroleum investment reached $34 billion last year alone, and there are $55 billion worth of projects committed to or under construction, with another $121 billion further down the investment pipeline. The sector also delivered $10.6 billion in royalties and related revenues. That means jobs, business and revenue funding for our hospitals, schools, roads and essential services.
But those investment decisions depend on confidence—confidence that projects can be proposed, assessed and approved under clear and predictable rules. The Mount Pleasant decision puts that certainty at risk. Consider Western Australian iron ore, for example.
If iron ore mined in the Pilbara is exported to China and processed into steel, should a Western Australian miner be responsible for the emissions generated by a Chinese steel mill? Of course not. Australia exports around 900 million tonnes of iron ore each year.
Processing that overseas generates more than 1.3 billion tonnes of carbon dioxide, around three times Australia's entire annual domestic emissions. Are we seriously suggesting Australian miners should dictate how their customers operate steel mills in China, or that Australian LNG producers should be responsible for decisions made inside power stations in Japan or South Korea?
It is neither practical nor consistent with the international emissions framework. If Australian coal is burned in India, India accounts for the emissions. Scope 3 requirements risk making Australian businesses answerable for emissions already accounted for by another sovereign nation.
Worse, it does nothing to address global demand. The Chamber of Minerals and Energy in Western Australia, in response to this decision, has warned that shutting down Australian projects will not make global demand disappear; investment will simply move elsewhere—potentially, to countries with weaker environmental protections, lower workplace standards and poorer safety records.
The emissions remain. Australian jobs, investment, royalties and taxes disappear with those investments. That is environmental policy defeating itself.
WA has particular reason to be concerned. Petroleum exploration expenditure has already fallen to its lowest level in 30 years. Major projects, such as Browse, require billions of dollars of patient, long-term capital.
Investors need certainty, not the prospect that an approval granted today can face years of litigation tomorrow over emissions generated by someone else in another country and beyond the project operator's control. People are alarmed, because this has imported investment uncertainty and Labor can't be trusted with these matters.