Andrew Leigh (Fraser, Australian Labor Party, Parliamentary Secretary to the Prime Minister) Share this | Hansard source

If those opposite had the same view on climate change as the member for Wentworth did then my suggestions would be quite unjust. But, when climate change is raised, it is from that corner of the House that we hear the greatest cries. We refer to 'dangerous climate change' and it is as though a set of crackers had gone off in the seats on that part of the House. We have a fixed price in our emissions trading scheme which will conclude in June 2015. From then the carbon permits can be auctioned and traded allowing the market to determine the carbon price. That will ensure that emissions are reduced in the cheapest and most effective way.

In July 2015 there will be an annual cap on the number of permits, which means there will be a cap on pollution. The current low market prices we are seeing in the European emissions trading system, to which we will link in 2015, does not detract from the environmental integrity of our pollution cap. Sound economic policy, sound social policy, sound environmental policy—that is this government's economic legacy.

The Leader of the Opposition has claimed that the carbon price would destroy thousands of jobs, that it would wipe Whyalla off the map. The reality is that since the price started employment has grown by more than 150,000 with the total number of jobs gained since Labor came to office now close to one million, at a time when unemployment has grown by 28 million worldwide. The latest consumer price index figures show the inflation rate was 2.5 per cent in the year to March—in the middle of the Reserve Bank's target zone for inflation. Westpac's economics team has estimated that the carbon price has increased the CPI by just 0.4 percentage points, less than Treasury's estimate of 0.7 percentage points.

The member for North Sydney, the Leader of the Opposition and the member for Wentworth know this, but it is a measure of the opportunism of the opposition that they choose to ignore it. The Australian Industry Group has '…long argued that an emissions trading scheme is the most flexible path to reducing greenhouse gas emissions at least cost'. Lord Stern, possibly the greatest world authority on the economics of tackling climate change, wrote a letter to the member for Lyne, which he has given me permission to quote in this place. That letter of 11 June 2012 recognises the benefits of Australia's carbon pricing scheme. Lord Nicholas Stern says:

A carbon price addresses a key market failure: emissions of GHGs represent an externality in that they cause great damage to the prospects of others … Australia is … acting to address these … crucial market failures.

Nicholas Stern also sees our economic policy as good public policy:

A clear, credible and stable climate change policy regime represents a unique opportunity for Australia: it could drive a new energy-industrial revolution, similar to past waves of innovation and technical change, such as the continuing ICT revolution. There is great potential for new products, processes and technologies to be developed across the economy and society. This fits well with Australia's entrepreneurial culture. Indeed, it fits well with Australia's long tradition of innovation and culture of creativity. Institutions such as the CSIRO are already making strong progress.

Nicholas Stern also notes:

Australia is also acting to address these other crucial market failures, e.g. the $10 billion Clean Energy Finance Corporation could help to reduce long-term risk around financing for low-carbon infrastructure.

The strength of Labor's economic policies is being recognised internationally, but not just in the UK. President Obama himself has recently said:

Nearly a dozen states have already implemented or are implementing their own market-based programs to reduce carbon pollution. More than 25 have set energy efficiency targets. More than 35 have set renewable energy targets. Over 1,000 mayors have signed agreements to cut carbon pollution.

And as the Prime Minister noted in question time, 'President Obama remains strongly of the view that an emissions trading scheme is the most efficient way of dealing with dangerous climate change.'

But the commitment to a market-based mechanism for dealing with dangerous climate change also extends to China. Nominally a communist country, it saw a pilot emissions trading scheme launched on 18 June in Shenzhen. Pilots in Beijing, Tianjin, Shanghai, Hubei and Guangdong are expected to be launched this year. There is a deep irony in that the Liberal and National parties, which are nominally parties of the free market, are standing against the use of a market-based mechanism to deal with climate change, while nominally communist China is supporting a market-based mechanism. Of course they are doing so for a very simple reason: it is the most efficient way of dealing with dangerous climate change.

Labor's economic legacy is a strong one. The Australian economy has grown 14 per cent since 2007, a period when the United States has only grown a couple of per cent and Europe has actually shrunk. (Time expired)

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