Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Hansard source

I thank the member for his question. I think the member had missed something absolutely pivotal and central to the scheme, which is that the entities paying the carbon price are the biggest polluters. So where the price signal is working, it is working as a price signal to the biggest polluters to innovate and to change the way that they conduct business.

This is exactly the same mechanism that the John Howard emissions trading scheme had at its heart, which was supported by the Leader of the Opposition and all of the members of the front bench who were ministers at the time. So at the moment these businesses that generate carbon pollution can put any amount of carbon pollution into the atmosphere for no cost. It does not matter if next year you put more up into the atmosphere than this year because it is at no cost. Why would you bother innovating to reduce the amount of carbon pollution? You do not face any costs. So the way in which carbon pricing will work—

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