Julia Irwin (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

Just before the budget was released, the Prime Minister announced that Australia would fund the Global Initiative on Forests and Climate. The fund would be used to assist developing countries faced with illegal logging and forest clearing. But it struck me that this $200 million program was just another one of those back-of-a-napkin policies that this government is desperately putting together as it faces annihilation at the next election. There is definitely genuine concern at the rate of forest clearing in tropical parts of the world, and illegal logging for timber products is a problem that needs attention, but the Howard government has become so accustomed to throwing money at problems that it thinks this will do the job again. If the government is asked what it is doing about climate change, it can say that it is spending millions to save the tropical forests. But, when it comes to the causes of the greatest deforestation in the tropics, this government cannot see the forest for the trees. The slash-and-burn operations which are devastating large areas of forests in South-East Asia and South America are not only to exploit the timber resource; increasingly the main objective in forest clearing—

Greg Hunt (Flinders, Liberal Party, Parliamentary Secretary to the Minister for Foreign Affairs) Share this | Link to this | Hansard source

Mr Hunt interjecting

Julia Irwin (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

quite obviously they do not like this speech, because it is the truth—is to plant biofuel crops such as palm oil and sugar cane. The demand for these crops is driven by policies in the United States and Europe which demand higher levels of biofuels, requiring as much as 10 per cent of the volume of fuels from so-called renewable sources. The effect of this is already clear from the diversion of corn crops in the United States. It is estimated that by next year one-third of the US corn crop will be used for the production of ethanol. An immediate effect of the European Union mandating biofuels, and the increase in crude oil prices, is the vastly increased demand for sugar cane and palm oil. The increased production of these crops is coming from the very slash-and-burn practices that the government says it wants to prevent.

Trying to achieve an outcome in the face of the policy driven demands for biofuels in the United States and Europe is just bad policy. Unless the leaders of developed nations rethink their doomed policies, we face a double disaster. We face the environmental consequences of tropical forest clearing on a scale far beyond anything we have seen so far. As well as that, we face an economic and social disaster resulting from massive increases in staple food prices. In the words of economist commentator Max Walsh:

The US sees corn-based ethanol as the answer to its oil and greenhouse problems. The resulting agriculture revision could well fuel global recession.

The government should consider those words when it implements its initiative. (Time expired)