Mark Butler (Port Adelaide, Australian Labor Party, Shadow Minister for Environment, Climate Change and Water) Share this | Hansard source

I am flattered by the interest but I am happy to keep going without the member's interjections. Two weeks ago a survey of Australian business and academic economists showed that 86 per cent favoured an ETS. In August, a survey by AECOM of Australian business showed an overwhelming preference for an emissions-trading scheme and only seven per cent support for the Liberal Party's policy. If these bills pass unamended, an ETS in Australia disappears. The Prime Minister truly gets his way in throwing the baby out with the bathwater: no legislated cap on carbon pollution; no market mechanism with business to tap into; and all Australia is left with is the so-called direct action policy.

As the member for Wentworth foresaw, this policy is nothing more than an environmental fig leaf to cover up the fact that this is a party that has no commitment to taking real action to mitigate climate change. It is a policy that was devised at a time when climate scepticism had swept through the Liberal Party like a virus; while the world is moving on, Australia is at risk of being stuck with it.

The first point to make about the Liberal policy is that it is unique, and not in a good sense. No-one else has a policy like this on climate change. It is true that a nation like the United States is directly regulating the electricity and transport sectors' emissions, but President Obama is only doing that, he says, because the US Congress will not pass an emissions-trading scheme. And that sort of direct action is a far cry from the carbon slush fund that lies at the centre of this government's plans.

The most fundamental failing of the Liberal policy is that it does not include a legal limit, or cap, on carbon pollution; it relegates our international commitments on pollution reduction to a mere aspiration. Indeed, during the election campaign, Tony Abbott confirmed that if his funding was not adequate to reach the target—as most experts expect will be the case—then the target is dispensable. The other major failing of the Direct Action Plan is its reliance on highly contested ideas to reduce carbon pollution—in particular, soil carbon technology, which the minister describes as their 'major plank'. The policy presumes that soil carbon can deliver up to 85 million tonnes of reduction per year at just $10 per tonne. Since its release, a University of Western Australia study found the cost to be more like $80 per tonne, and Mr Hunt's own department estimates the technology can only deliver 1/20th of the claimed reductions.

Experts, including CSIRO, have similarly rejected the assumptions made around reforestation. More recently, the minister has presented his Emissions Reduction Fund as the centrepiece of their climate change policy. He describes this as a reverse auction, where government will pay bidders for the lowest-cost abatement idea presented. The level of detail about the Emissions Reduction Fund is laughable. This carbon slush fund will end up paying polluters for highly speculative ideas that might never actually deliver. The minister compares the ERF to water-purchasing arrangements, yet ignores the fact that very precise, existing water entitlements are offered up under that program, with delivery happening then and there. Under the ERF, it might be years before the bidder can actually demonstrate delivery, and at what cost. Also, it remains unclear whether the ERF will pay polluters for changes they were intending to make anyway, such as the question of additionality, as well as whether pollution reduction will need to be permanent, measurable and internationally recognised.

In recent times, a number of independent reports have found that the levels of production in carbon pollution required of the Liberal policy will cost several billion dollars more than suggested by the coalition. Given that the Liberal policy involves the government handing billions of taxpayer dollars over to polluters, the overall cost will rise in line with the cost that polluters claim to reduce each tonne of carbon pollution. Treasury estimated a cost of $80 per tonne by 2020 under their policy. With a reduction target that year of around 150 million tonnes, the total cost to the taxpayer in that year will be $12 million or $1,200 for each of Australia's 10 million households on average. This huge cost was increased by the coalition's refusal to let Australian business purchase units from overseas—a point that has been made time and time again very forcefully by the Australian Industry Group.

For these reasons and more, it is little surprise that in more than three years the coalition has been completely unable to present a single credible climate scientist or economist who will support the policy. Equally, the minister has been unable to point to a single country which is adopting this approach. Other nations are generally introducing ETS schemes or using direct regulation to impose emission standards on sectors like power generation and transport. Indeed, during the 2013 campaign, the minister verballed two Nobel laureates as supporters of the Liberal policy who, when followed up for comment by the media, both indicated they had never heard of the policy let alone read it and had never spoken to Mr Hunt about it.

Anyone who has seriously examined the so called direct action policy has found that it will cost households more and it will be much less effective at cutting carbon pollution. At the same time, the Prime Minister is confronted by the inevitable collision between the hysteria of his campaign over the past three years and the realities now of being in government. It is now completely clear that his overblown promises about relief on power prices will likely come to nought. The takeaway message from the energy sector, the grocery sector and big business over the past few weeks has been to not hold your breath for any prices to come down if these bills pass.

Three years on, it is crystal clear that the Liberal policy will not work. Equally it is clear that Labor is willing to cooperate in terminating the carbon tax. The obvious way forward for Australian business and Australia's households is for the Prime Minister to swallow his pride and for the parliament to work together on an emissions trading scheme.

The final points I would like to address concern the government's winding back of Australia's commitment to renewable energy contained in these bills. The growth of renewable energy in Australia has been an out and out success story. During our term in government, wind energy trebled, jobs in the sector more than doubled to more than 24,000, and the number of households with PV solar panels skyrocketed from a few thousand when John Howard left government to more than one million today. In 2012-13, renewables increased their share of the national electricity market by 25 per cent in just one year. While the Liberal and National parties have paid lip service to our renewable energy target of 20 per cent by 2020, they are now crab-walking away from it. The Prime Minister's recent remarks on the Alan Jones show revealed that he is now open to lobbying from old style business to wind back wind and solar energy development. These bills abolish the Clean Energy Finance Corporation, a body making loads on commercial terms to help new, ambitious renewable projects get a foothold—projects like the Macarthur wind farm, the largest wind farm in the southern hemisphere. The bills also without any prior notice, strip ARENA, the renewable energy agency, of almost half a billion dollars in funding. This is an agency that used to enjoy bipartisan support and which provides critical start-up funding to emerging renewable technologies like the largest PV solar farm in the southern hemisphere that was announced earlier this year.

In conclusion, I confirm that the opposition will be moving amendments in due course to the principle bill, which, while supporting the termination of the carbon tax on 30 June next year, will replace it with an emissions trading scheme. I also confirm that the opposition, even if those amendments were carried, will not support the abolition of the Climate Change Authority or the Clean Energy Finance Corporation nor will we support legislation to abolish tax cuts promised as part of the household assistance package or cuts to the ARENA budget.

Finally, I move as a second reading amendment the following proposition:

That all the words after "That" be omitted with a view to substituting the following words:

"the House declines to give the Bill a second reading

1. because it would be ill advised to continue without consideration of the broader policy issues set out in paragraph 2, related to the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 and related bills; and

2. because of:

(a) the impact of the abolition of the Climate Change Authority and the Clean Energy Finance Corporation on ongoing transparency and investment in climate change;

(b) Government plans for emissions reduction and further development of renewable energy; and

(c) the international position of Australia in relation to climate change."

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