Greg Hunt (Flinders, Liberal Party, Minister for the Environment) Share this | Hansard source

I would be delighted to. The first thing is that the American program sets out a simple proposition: it allows us to reduce emissions without a carbon tax, without a cap-and-trade scheme, without an emissions trading scheme. In fact, the last time that there was an attempt to introduce such a scheme in the United States, when all three arms of the American system were aligned on a party basis—a Democrat congress, a Democrat Senate and a Democrat presidency—one of the leading Democrat candidates for the Senate, Joe Manchin, from West Virginia, took the cap-and-trade bill, tied it to a tree and shot it. That was really the last time that we saw any action in the United States towards a cap-and-trade scheme.

By contrast, what we see now is that the White House plan, which we endorse and support and value and appreciate, as a critical global contribution, takes a very different approach. It does not, to the best of my knowledge and reading, mention cap-and-trade, an emissions trading scheme or a carbon tax at any point in the documentation. I stand to be corrected, but on my reading that is a very clear position. Beyond that, what does it seek to do? It seeks to encourage two primary things. It seeks to encourage energy efficiency and the cleaning-up of coal fired power stations. Compare that with the carbon tax that we currently have in Australia. What you see here is a transfer of $5½ billion from the taxpayer to the brown coal generators, largely within Victoria.

However, in the United States the system is very clear: they are seeking to clean up the power stations, to provide incentives to engage in gasification, drying, potentially carbon capture and, most likely, reuse. They are also looking at cleaner transmission. They are also looking at general plant efficiency. All of these things are precisely the outcomes which we are considering under the Emissions Reduction Fund. It will depend upon proposals that are the most cost-effective and the cheapest, but it is absolutely clear that the power sector is already looking at those sorts of options.

The other thing I want to say about the United States is: we have long said that you cannot have an effective functioning global agreement without an agreement between the US, China, India and the EU. So what we see in the United States is a fundamental step towards an agreement at the end of 2015 at the Paris UNFCCC conference. This is something to be welcome and embraced. But let us not kid ourselves that this is anything other than an alternative to a carbon tax. The White House papers could not be clearer that this is not a carbon tax. They do not make any mention of a carbon tax, a cap-and-trade or an emissions trading scheme.

The other point I want to make here is sometimes there is reference to China as if China had a broad based functioning carbon tax. Let me give three examples: the city of Shenzhen gives away 100 per cent of its permits for free—in other words, there is no charge; the city of Shanghai gives away 100 per cent of its permits for free; and the city of Beijing gives away 99.9 per cent of its permits for free. The difference between what we have here in Australia and what we see in China is the difference between a bowling ball and a pea.

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