Nola Marino (Forrest, Liberal Party) Share this | Hansard source

changes that have added another layer of uncertainty and cost. With this legislation, the government is linking the Australian carbon market to the European Union's Emissions Trading Scheme. The explanatory memorandum which the government presented with the bill proudly states that the 'global market is growing year by year with markets emerging across the globe', but it conveniently forgets to mention that emissions are growing at the same rate. No wonder then that the price attached to the European scheme allowances has been in a constant state of devaluation.

I want to have a look at this Rolls-Royce scheme that the Labor government is leading Australia's economy to. It is currently trading at around A$10 a tonne. It is predicted in some circles to drop as low as three or four Australian dollars. Prices for December in 2012 showed that delivery of EU allowances fell by 50 per cent throughout 2011 and volatility has beset the EU ETS since its inception. In the first phase in 2005 to 2007, prices started around 30 euros a tonne, but by May 2006 they had fallen to 10 euros. This is a Rolls-Royce system. By March 2007 they had plummeted to 1.2 euros, and by the end of the first phase they were worth a mighty 10 eurocents.

Phase 2 of the EU ETS from 2008 to 2012 saw prices start at 20 euros optimistically, down to 13 euros in 2009, and they have spent most of this year under 10 euros. This is because the European ETS is not efficient or effective—it is corrupted and impotent—and this is the volatile market that the Labor government is linking Australian business, industry and our economy to.

The initial caps and free permits agreed to by member countries were really status quo for emissions not emissions reductions, and countries just shifted their operations outside the eurozone to countries with no ETS or carbon price. Massive offsets were available to countries that hid emissions growth in member nations. All these underlying problems just show you that the EU ETS is fundamentally flawed. And yet this is what Labor is seeking to tie Australia's economy and our carbon tax to.

Do not take our word for it. Last year the Union Bank of Switzerland, the second largest Swiss bank and one of the world's most respected banks, released a damning report into the European carbon market. The UBS report was titled Carbon price to collapse, 210 billion euros wasted, and says of the carbon price that there had been 'limited benefits and embarrassing consequences, including euro-billions of windfall profits and fraud'. The report states that the European carbon market has had 'almost zero' impact on emissions. I thought this was an environmental measure.

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