Malcolm Turnbull (Wentworth, Liberal Party) Share this | Hansard source

I thank the parliamentary secretary for his courtesy. As I said, if in fact there are hundreds of millions of tonnes of very low cost agricultural offsets capable of generating carbon credits then they are all potentially available in this ETS, in the CPRS proposed here in this legislation, and they will lower the cost of permits. In other words, if polluters can buy carbon credits for $10 a tonne from farmers, permit prices will adjust down to that level. Of course, the great virtue of a market based scheme is that instead of the government decreeing what the best and cheapest offsets are, the participants in the market work it out for themselves. That is why, once agricultural offsets are recognised under the emissions trading scheme—and that is the plan with this legislation—there is enormous potential for farmers and other landowners to generate real revenue. However, it should be noted that until those offsets are recognised internationally, they will not be of assistance in meeting our five per cent 2020 target.

One of the leading Australian biochar advocates wrote to me the other day and said:

While I worked in Government for a significant part of my life I am horrified by the prospect of a ‘fund’ from which public servants give handouts to grow trees—it just does not work—we have to have a market price and a market system …

Is the ETS proposed in these bills the right design and is this the right time to act? The answer here, too, is yes. Most other large emitters have also committed to substantial quantitative reductions in their greenhouse gas emissions over the next decade. Many have already acted to achieve those targets. The European Union has had an ETS since 2005 and in phase 3 of its scheme is enforcing it with increasing stringency. In line with the Copenhagen accord, China has committed to a 45 per cent reduction in emissions per unit of output by 2020 and the Chinese are already investing massively in cleaner energy sources, both of which point to a ‘shadow’ price on carbon already in force across the Chinese economy.

I note that the Chinese commitment is to reduce emissions from their ‘business as usual’ rate. They recognise that business as usual is not good enough and that they must reduce their emissions intensity and then reduce the absolute level of emissions. Japan has pursued lower emissions and higher energy efficiency for three decades. Brazil has committed to lowering its emissions by more than a third against its projected business-as-usual 2020 emissions. I note again that our commitment to reducing our emissions by five per cent from 2000 levels is equivalent to a 21 per cent reduction from our projected 2020 emissions without a CPRS.

While Copenhagen was disappointing, it did nonetheless for the first time see the developing nations—particularly the major ones, such as China and India—make commitments to reduce their emissions. That was an enormous breakthrough. There is a global commitment to act so as to keep temperature rises this century below two degrees Celsius. The notion that this ETS would put Australia out in front of the world is, sadly—I wish it were not so—completely wrong. Far from being in front of the world in action to reduce emissions, we start behind because our per capita emissions are so large and because our sources of energy are overwhelmingly dependent on burning coal. We should not forget that when the Howard government committed to an ETS in 2007 the world was much further away from concerted global action than it is today. Indeed, the Shergold report noted:

The prospects for comprehensive global action in the near future look poor.

But the Shergold report, in recommending an ETS, observed:

…waiting until a truly global response emerges before imposing an emissions cap will place costs on Australia by increasing business uncertainty and delaying or losing investment.

This legislation is the only policy on offer which can credibly enable us to meet our commitment to a five per cent cut to emissions by 2020 and also has the flexibility to enable us to move to higher cuts when they are warranted. So for those reasons I support this bill. The arguments I have made for it are no different to those I have made, and stood for, for the last three years.

During my time as Leader of the Opposition I often defended the right of my colleagues from time to time to cross the floor and vote in accordance with their strongly held personal beliefs. This is a longstanding and treasured principle of the Liberal Party and very different to the tradition of the Labor Party. In that context, I commend the courage of my colleagues Senator Troeth and Senator Boyce who crossed the floor to support this bill and effective action on climate change late last year. The importance of this issue, the expectation that Australians have that their parliamentarians will lead on it, the fact that the emissions trading scheme being considered is nearly identical to the proposal put to the electorate by the Howard government in 2007 and my strong and longstanding personal commitment to effective action on climate change make it impossible for me to vote against this bill, amended in terms as agreed between the coalition and the government last year.

The proposed ETS is a balanced, substantive and timely step forward on an issue of immense importance. By relying so heavily on market forces to address this very severe challenging problem, the ETS is far more in the great traditions of modern liberalism than any other available policy response. After all, I have always believed that Liberals reject the idea that government knows best and embrace the idea that government’s job is to enable each of us to do our best. This ETS allows Australian businesses to make their own decisions as to how to reduce their emissions. Government sets the rules and, in particular, sets the cap on total emissions and then lets the market work out the most efficient and effective outcome. Schemes where bureaucrats and politicians pick technologies and winners, doling out billions of taxpayers’ dollars, neither are economically efficient nor will be environmentally effective. For those reasons, I will be voting in favour of this legislation.

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