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

Perhaps the environment minister has not gone to the extent of saying China would never introduce carbon trading but certainly the Prime Minister has; this has been repeated by him and many others. I will concede that that is an important point because China has quickly become the largest emitter of carbon dioxide, the largest polluter in terms of carbon dioxide pollution. Despite the fact that China still only emits about a quarter of the carbon pollution per head of population that Australia does, in aggregate terms, being a very large country, it is now by far the biggest carbon dioxide polluter. It has been responsible for about two-thirds of all the growth in carbon pollution that has occurred since 2000. So I will concede that the Prime Minister is right to be focused on what is happening in China because it is such a significant part of what is, after all, a global problem. But again he is just wrong. Maybe it was a reasonable position to take a few years ago, but he should admit now that he has been wrong and China has changed. Anyone who takes an interest in this area of policy will have noticed an extraordinarily significant change in policy from the Chinese leadership in the last 18 months, particularly because of the awful air quality in the northern part of that country.

I have talked about a number of the bilateral agreements, statements and memoranda of understanding that at a leadership level, particularly with Premier Li Keqiang, China has engaged in with the United Kingdom, the European Union and the United States. These are incredibly important statements of intent by China not just to do a whole lot of things domestically—which they are doing—but also, following the disappointment of Copenhagen, to be a leader, along with the United States, as one of the two largest economies and powers in the world leading into the very important conference that will take place in Paris next year. Last week the seventh emissions trading scheme started in China—some of them are at the provincial level, for example, in Guangdong, and some of them are starting up at the city level, for example in Shenzhen—with the expectation that the Chinese leadership will try to move to a national carbon trading scheme in the second half of this decade.

The Minister for the Environment often says that these permits are given away for free. Such may be the case in some of the different markets, but what is clear is that in all of those six markets that have been operating for a while there is now a burgeoning carbon trading market. If you look at Shenzhen, for example, which I think was the first emissions trading scheme introduced in China, a permit was trading last week—and I have not looked at this week's price—at the equivalent of about 8.5 euros, so higher than the price at which the permits would trade, on Treasury advice, under Labor's emissions trading scheme with a linkage to the EU scheme, higher than the price at which permits would trade under the amendments that I will be moving later in this debate.

Whopper No. 7 is that the carbon price mechanism, the framework that the government seeks to demolish entirely, would be a wrecking ball through the Australian economy. The Prime Minister used a whole range of different colourful epithets for this. He said it would be a cobra strike at the economy. He said that the South Australian town of Whyalla would simply disappear off the map. I think he made the same prediction about Gladstone and some other parts of Australia as well. Again, the truth is entirely different. The truth of the impact was exactly as Labor predicted. The economy did keep growing. More than 160,000 additional jobs were created in the first 12 months of this carbon price mechanism that, according to the now Prime Minister, was going to have a wrecking ball impact on the national economy.

Also what it started to do, along with our renewable energy policies, is drive down carbon pollution, particularly in the electricity market, which is the largest source of carbon pollution in Australia. We saw a reduction in carbon pollution of around seven per cent in the National Electricity Market in the first 12 months and, as we predicted, there was simply a modest impact on prices. That impact was more than covered through our household assistance package, particular for low-income and fixed-income households, like pensioners, and for middle-income households. The impact on power prices again was exactly as we predicted and again was covered by our household assistance package, particularly for low- and middle-income households.

Taking my own state of South Australia for example, power prices went up by about 4.6 per cent as a result of the introduction of a carbon tax. If our amendments are passed to move to an emissions trading scheme, Treasury's advice to us in government is that that impact would be reduced by about three-quarters. So the ETS impact on South Australian power bills would be in the order of 1.1 per cent and that is way more than covered by the household assistance package. To put that into context we should compare it to the increase over the last four years in SA power bills of 43 per cent because of investment in poles and wires—the network investment that has bedevilled electricity systems all around the country. That very significant gold plating of network infrastructure has led to very significant increases in power prices, which again the Prime Minister mendaciously tried to attach to the carbon price on many occasions.

Whopper No. 8 was the Prime Minister's statement to Alan Jones earlier this year that the renewable energy targets 'are significantly driving up power prices right now'. Again, that is simply wrong. Report after report released recently has put the untruth—I was going to use some other word—to that statement. The renewable energy policies that the Labor Party put in place over the last several years have been an unambiguous success. They have seen renewable energy capacity expand significantly. Wind power tripled under our time in government. When we came to government we saw the number of households that had PV solar panels go from 7,500 to more than 1.1 million households. They are getting out of the power bill race, getting out of the power bill trap, creating their own power and relieving enormous pressure on the grid, particularly in those parts of Australia that are impacted by heatwaves.

We saw the tripling of the number of jobs in the renewable energy sector. We saw billions of dollars come into this sector in investment to the point where by the middle of last year Australia was rated, along with the powerhouses in this area—China, Germany and the US—as one of the four most attractive places in the world to invest in renewable energy. It is no surprise that, since the election of the new government, Australia has slipped in that index a couple of places every quarter. I think it is now about eighth in the world when it was fourth.

This has been an extraordinary success. As every renewable energy program in the world does—and there are dozens and dozens—it does have modest up-front costs but it also has swings and roundabouts benefits in the sense that it is suppressing wholesale power prices, particularly at the peak times for power during heatwaves when power might be sold for thousands of dollars, particularly in the south-east of Australia. Those prices have diminished by as much as 90 per cent in those peak times and that flows through to consumers.

I mentioned some reports that have been clear about this. The ROAM Consulting report that was released I think a month or two ago, the Bloomberg New Energy Finance report that was released a few weeks after that and even ACIL Allen's report, the consultancy engaged by the government as part of its renewable energy target review, have confirmed that prices will go up if the renewable energy target is removed because that suppression effect on wholesale power prices will be removed and consumers will be exposed to the almost certain increase in gas prices that we are going to see as the LNG capacity comes on in Gladstone.

Whopper No. 9 is that the government's direct action policy will achieve the bipartisan minimum target to reduce carbon pollution by five per cent by 2020. There is not one serious commentator that agrees with this whopper—not one serious commentator. It is a whopper that has been repeated by the now Prime Minister and by the now Minister for the Environment for four straight years with a straight face. I commend them for that, because there is not a serious commentator that agrees with them.

I had the opportunity to address this at length in a debate yesterday, and I do not propose to go through that again, except to say that in the most recent report about this, from RepuTex, a very expert modelling firm that works in this area, it reported that the direct action policy would fall about 70 per cent short of the target. Ken Henry, the former Secretary to the Treasury, confirmed earlier this year that, for the direct action policy to achieve the target, the government would have to spend between $4 billion and $5 billion of taxpayer dollars every single year to pay polluters to start to reduce their carbon pollution—rather than having an emissions trading scheme that has the polluters pay.

Whopper No. 10 was a whopper that the Prime Minister engaged in, again in his overseas trip. It was after President Obama released his Clean Power Plan, a very significant plan to start to reduce carbon pollution in existing power plants. This follows on from the President's plan to impose emissions standards or pollution standards on motor vehicles and on new power plants. This was about existing power plants, a reduction of 30 per cent in that pollution by 2030. The Prime Minister said—again with a straight face—that President Obama's plan was 'very similar to the actions that my government proposes to take'.

Once one gets through the laughter about that statement, one goes back to the member for Wentworth because the member for Wentworth expressed it better, I think, than anyone else has when he said about Direct Action that it is simply a 'fig leaf to cover a determination to do nothing'—and, for that matter, 'a recipe for fiscal recklessness on a grand scale' was the statement that the member for Wentworth made in the debate in this place. The direct action policy has no discipline on pollution whatsoever. The so-called safeguards mechanism has been discarded by this minister, so all you have is a dressed-up slush fund to pay taxpayers' dollars to big polluters to start to reduce their pollution.

Labor's position on these bills will be no surprise. It will be the position we enunciated clearly to the electorate in September, a position we have been advocating ever since, and that is to terminate the carbon tax now and to move to an emissions trading scheme that has a formal, legal cap on carbon pollution for the first time ever in this country, a cap that reduces over time and then lets business work out the cheapest, most effective way to operate. I foreshadow that, in the consideration in detail stage, I will be moving amendments to that effect.

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