Stuart Robert (Fadden, Liberal Party) Share this | Hansard source

The Prime Minister is simply asking us to take him on faith. Well the nation took him, and his health minister, on faith when he said three times in unequivocal statements that a Labor government would not change the 30 per cent rebate for private health insurance; but that is exactly what they have done. This nation is sick and tired of taking the Prime Minister on faith. We have provided the government with bipartisan support to take to Copenhagen the most important thing required: support on reducing targets by five per cent, increasing to 25 per cent if there is indeed a worldwide agreement. The opposition supports an emissions trading scheme as one of the tools in a climate change toolbox. Other issues that should be considered include carbon sequestration, a voluntary carbon market and the use of biochar—and, of course, the Leader of the Opposition has spoken about a green cities initiative with advanced depreciation to achieve efficiencies in energy use. All of these together are strategies needed to manage the risk of climate change. Everything should not be sacrificed on the altar of ETS expediency so the Prime Minister can look good at Copenhagen.

It is also important that as a parliament we learn from the mixed results coming out of the European Union’s experience with their ETS and acknowledge the dire consequences of not getting it right. The European Union’s emissions trading scheme is the largest multinational emissions trading scheme in the world. It is a major pillar of the EU climate policy. Their ETS currently covers more than 10,000 installations in the energy and industrial sectors, which are collectively responsible for close to half of the EU’s emissions of CO2 and 40 per cent of their total greenhouse gas emissions. Yet the British think tank Open Europe has this to say about the EU’s implementation of an ETS. They say:

The first phase of the EU’s Emissions Trading Scheme (ETS), which runs from 2005 to 2007 was a failure. Huge over-allocation of permits to pollute led to a collapse in the price of carbon from €33 to just €0.20 per tonne, meaning that the system did not reduce emissions at all.

Worse still, since some countries (such as the UK) had set tough quotas on emissions, and others set lax targets, the system acted as a wealth transfer mechanism, effectively subsidising polluters in states which were making little effort by taxing states with more stringent allocations. Overall there are about 6% more permits than pollution. However the UK has to buy about 22 million tonnes worth of permits a year, while firms in France and Germany could sell off a surplus of around 28 and 23 million tonnes respectively.

Finally, the ETS in phase one was not a real market—instead of auctioning off permits to pollute, member states allocated them free of charge to companies based on how many the government believed they needed.

This created severe distortions—to the point where emissions covered by the ETS rose 3.6 per cent in the UK and by 0.8 per cent across the EU as a whole. What an amazingly effective ETS that was! The world’s first great implementation should teach us lessons. The Prime Minister should learn them. The Leader of the Opposition has moved amendments to defer the vote on the bill until after Copenhagen, until after the Productivity Commission has done a full and frank a review, and, importantly, until after the US legislation which will set the global benchmark is known. I urge the Prime Minister to heed some sound and simple common sense.

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