Greg Combet (Charlton, Australian Labor Party, Minister Assisting the Minister for Climate Change) Share this | Hansard source

You would think, listening to the Leader of the Opposition, that the opposition is seeking to debate a piece of coalition policy. But what was released yesterday by the coalition was a report by a consultant that adds to a whole host of reports that have been published in relation to climate change and the development of an emissions trading scheme. In fact, it is not coalition policy, as confirmed by the Leader of the Opposition, and it means that the only substantive piece of policy work advocated by a political party in this place that is in the form of detailed legislation that has followed many, many months of detailed preparation and work and extensive consultation—the only piece of substantive policy work—is represented in the Carbon Pollution Reduction Scheme legislation which has been passed by this House and which is currently before the Senate. That is the only piece of detailed work that is the subject of consideration and relevance here. In two days time in the Senate a vote is due upon that scheme, and it is important—given that it is the only detailed policy work, it is in the form of legislation passed by this House, and it is currently before the Senate—that we do revisit exactly what that legislation is founded upon, and what it intends to do from an environmental and economic standpoint.

The underpinning foundations for the Carbon Pollution Reduction Scheme are the science. The science is unequivocal. It is the overwhelming consensus view of international scientists—represented in the fourth assessment report of the Intergovernmental Panel on Climate Change, involving 1,250 scientists with peer reviewed work from 130 countries—which tells us that the climate system is warming, and that human-induced emissions of greenhouse gases are responsible for that warming. The science is also telling us that the impacts of climate change are unavoidable and, if we are able to stabilise emissions at present levels, warming of at least 0.6 degrees Celsius will occur. However, if no action is taken—if there is no cogent policy response by this government and others around the world—we will see, on the basis of the scientific evidence, temperatures rising by up to five or six degrees Celsius above 1990 levels by the year 2100.

We must therefore dramatically reduce emissions, or serious consequences for society, for the economy and the environment will be the result. With increased ocean temperatures and acidity, our own Great Barrier Reef—which contributes to important biodiversity and, on an economic front, about $5 billion and around 60,000 jobs to Australia’s economy—will be prejudiced by these climate change events. A study released this week, for example, by Oxford Economics showed that total bleaching of the Great Barrier Reef would cost approximately $38 billion.

So we are confronted with a hugely important and serious challenge, and there is no excuse for inaction. The cost of inaction on every possible front, environmentally, socially and economically, will be far greater than the cost of taking action to combat climate change, and the government is committed to that action. We have set ambitious targets to reduce greenhouse gas emissions in this economy, and, of course, as this place is well familiar with, we have set a minimum, unconditional, targeted cut of five per cent in domestic emissions by the year 2020 if no other action is taken internationally in the context of an internationally negotiated agreement. But we have also set a medium-term target of cuts of up to 25 per cent in greenhouse gas emissions by the year 2020 in the context of a comprehensive, international agreement. This government will play its part internationally to help shape a global agreement consistent with stabilising carbon dioxide equivalent gases in the atmosphere at 450 parts per million, and our targets are consistent with that goal.

The Carbon Pollution Reduction Scheme will work by putting a price on carbon to help transform our economic structure to a lower carbon future. In partnership with that initiative, the other great institutional change that this government supports that is in legislation before this House is contained in renewable energy target legislation. This government proposes to increase the renewable energy target to 20 per cent of our electricity supply by the year 2020. In partnership with that, we are making huge investments in energy efficiency: $3.8 billion alone to install domestic insulation to reduce greenhouse gas emissions. In addition, we are supporting significant investment in carbon capture and storage technology to try and commercialise that technology to the benefit of the coal industry and lower-cost power generation, and we are supporting up to a $19 billion estimated investment in renewable energy sources by the year 2020.

The CPRS has been developed following many years of debate that go right back to earlier years in the Howard government. Eventually, under great pressure, the former Prime Minister, John Howard, commissioned Dr Peter Shergold to prepare a report and ultimately the coalition adopted an emissions trading scheme as its policy—but that was about the end of any action we saw from them and it was, of course, very late in the day. They never signed Kyoto. They are populated with climate change sceptics. They never took concrete action.

This government committed to the Kyoto protocol, in one of the first acts of the government. We are on track to meet our targets under that particular international agreement in the period 2008 to 2012. We have commissioned Professor Ross Garnaut to do comprehensive work. We have prepared a green paper and a white paper. We have consulted extensively with industry. We have prepared draft legislation. There has been months to consider it. Significant changes were announced to our policy position on 4 May in the context of the global financial crisis. And at every point along the way we have been cognisant of the economic issues that are pertinent to this policy issue, and we have acted to support jobs in the economy and to help provide a buffer against the impact of the global economic recession in the context of introducing the Carbon Pollution Reduction Scheme.

What have we seen from the other side? Nothing but chaos and delay—every attempt made to grasp at straws to try and delay consideration. As the Prime Minister said in question time today, on at least seven and now on eight occasions excuses were found for delayed policy responses in this context. There are climate change sceptics on the other side: the member for O’Connor has been extremely vocal; the leader of the National Party in the Senate has been no less vocal in challenging any policy response by the coalition in relation to this issue.

The underpinning principles of the CPRS are absolutely sound and have been worked through very thoroughly. It is a cost-effective cap-and-trade scheme that will meet hard targets, and we need to have a scheme that will meet targets. It will drive a carbon price through the economy. It has broad coverage, and cost effectiveness and equity across different sectors of the economy because of its broad coverage. In fact, 75 per cent of greenhouse gas emissions in our domestic economy are covered by the scheme.

Agriculture has been the subject of some debate. Of course, we have committed that agricultural emissions will be excluded from the scheme—at least until the year 2015—with a decision on their ultimate inclusion or otherwise due by the year 2013. And we have provided for credits to be created in relation to forestry activity under the CPRS. This furphy that has been put forward that agriculture is somehow being disadvantaged or included here in relation to the emissions is demonstrably false, of course. There will be adequate opportunity for all of the interests in the agriculture industry to continue to advance their opinions and do the detailed work that is necessary in partnership with this government.

There has been some talk about jobs and the impact of the Carbon Pollution Reduction Scheme on jobs in the regions and in what are termed emissions-intensive trade-exposed industries. This government has acted very carefully, in consultation with industries like aluminium smelting, cement manufacturing, zinc smelting, alumina refining and a whole host of others that I think we can adequately describe as both emissions intensive in their production processes and trade exposed, where we need, of course, to be cognisant of their competitive position in the international marketplace. We have done an enormous amount of detailed work to support those industries during the introduction of the Carbon Pollution Reduction Scheme, and to support the jobs of people in those industries.

The Leader of the Opposition is alert to the fact, of course, that I am a representative from the Hunter region. I can tell you that I am very, very conscious of the impact of the Carbon Pollution Reduction Scheme in my region. I am in consultation with the aluminium smelters in the region, with the coal miners in the region and with the electricity generators in the region. The Hunter is the heartland of coal-fired electricity generation for New South Wales. Eraring Energy, in my own electorate, produces 25 per cent of baseload electricity in New South Wales, and to suggest that these matters have not been considered carefully by the government is completely and utterly absurd. We have put on the table $750 million in transitional assistance over five years to support jobs in the coal industry in relation to those mining operations which have the most methane-intensive coal seams—a feature of the geology of our coal deposits within this country.

In relation to the issue of the price of milk and the CPI impacts—endeavoured to be raised in the clumsiest conceivable fashion by those opposite during question time today and in the Leader of the Opposition’s contribution—the government has done and published a detailed analysis of the price impacts in the most extensive Treasury modelling ever undertaken in this country in relation to a reform such as this. And we have put on the table a $6 billion assistance package that will ensure that low- and middle-income households are shielded from the price impacts of the introduction of the CPRS.

Let us come to the electricity generating sector. This is the sector that in the Frontier report—which is not coalition policy—I think it is fair to say receives the most assistance. It is proposed, under this Frontier report, to carve the electricity generation sector out. It produces up to 40 per cent of the country’s greenhouse gas emissions, but we will carve it out and we will put it under the operation of an emissions intensity arrangement. This is not a new arrangement. I was in a perfectly sound position at 9 am yesterday morning to respond, given the leaks that have emanated from the coalition side of politics about the Frontier report over the last week. From the media reports, our own experience in speaking to Frontier Economics, in listening to the advocacy of Mr Danny Price—who was running the press conference yesterday for the coalition—and in speaking to Mr Price, this emissions intensity concept is not a new concept. It has been around, it has been considered in all the formulation of the CPRS, and we were in a very sound position to know exactly what was coming.

The fundamental problem with an emissions intensity system as advocated in relation to this issue is that you cannot be certain about the delivery of hard targeted reductions in greenhouse gas emissions. When you add to it the coalition’s wish list that all emissions-intensive trade-exposed industries get 100 per cent free permits, we bring in the coal industry’s fugitive emissions—the methane emissions I alluded to earlier. They are all going to get 100 per cent free permits. Agriculture is going to be excluded for all the foreseeable future—that is 16 per cent of Australia’s greenhouse gas emissions.

What we have here is a magic pudding—you are putting all these things together. Double the assistance to the electricity generators, as well as take them out of the scheme, and we are going to have lower electricity prices as well—notwithstanding all of the costs that are added to the economy—and double the unconditional target. This is just a completely implausible proposition—lacking feasibility, not credible. The modelling is not transparent, the assumptions are not available for proper consideration and it is not even coalition policy. Who knows if it ever will be?

The proposition that is being put forward is not credible. It is not greener to put forward cuts of 10 per cent by 2020 when our proposal will achieve up to 25 per cent cuts in greenhouse gas emissions. It is not cheaper to increase uncertainty across the economy by having two schemes operating somehow in parallel and exempting all of these areas of emissions from the operation of the scheme. In fact, it opens up opportunities for the generators to have windfall gains.

It is not smarter, either, to avoid a decision today to continue to let carbon emissions rise. It is irresponsible for the coalition to advocate this position when it is not even their policy. They have got two days to make up their mind, and they should do the right thing in the national interest and in the environmental interest internationally, and vote for the Carbon Pollution Reduction Scheme.

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