Harry Jenkins (Speaker) Share this | Link to this | Hansard source

I have received a letter from the honourable member for Goldstein proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The adverse effect of the Government’s emissions trading scheme on employment and the economy.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Andrew Robb (Goldstein, Liberal Party, Shadow Minister for Infrastructure and COAG and Shadow Minister Assisting the Leader on Emissions Trading Design) Share this | Link to this | Hansard source

This is an issue of great consequence for all Australians, yet it requires judgement and great common sense, especially in the difficult times that the country is now experiencing. Sadly, however, on the question of climate change this government is legislating for certainty—the certainty of unemployment. The loss of tens of thousands of jobs will be directly attributable to the government’s flawed emissions trading scheme if it goes ahead. We all know that we best tackle climate change from a position of economic strength. It is no different for our nation than it is for a family. If a family or an individual wants to install a solar panel or a water tank to make a contribution to the climate, they cannot do it without a job or money in the bank. They cannot do it if they are not in a strong financial position. The same is true for Australia as a nation. Our ability to reduce the concentration of carbon dioxide in the atmosphere will be negligible if our economy is under severe financial pressure, if unemployment is high, if people do not have jobs, if debt levels are high and if investment is stalled. It requires people in jobs, it requires businesses to be performing strongly and it requires a cashed-up economy. If we get this emissions trading scheme wrong, not only will it do untold damage, it will also see the collapse of support for any future scheme designed to tackle carbon dioxide abatement.

Everyone agrees that as a country producing only 1.4 per cent of the world’s carbon dioxide emissions, there is no Australian solution to climate change. There is only a global solution. Everyone agrees that only coordinated global action will put a price on emitting or storing carbon dioxide. Only global action will have any impact on reducing the concentration of CO2 in the atmosphere. For this reason, the design of any Australian emissions trading scheme must be responsive to the existence, or the absence, of a global agreement. If an emissions trading scheme does not take account of what is happening, or not happening, in other countries then the design of the scheme is deeply flawed. Such a flawed design will seriously damage the competitive position of many of our industries and will see Australian jobs, investment and CO2 emissions being exported to countries where no price is being imposed on carbon. The government’s white paper on emissions trading is deeply flawed in this way. Our economy will be badly affected. I agree with Bob Brown that a badly designed scheme is worse than no scheme at all.

Before the election, the Prime Minister promised to introduce an emissions trading scheme which would lead to deep cuts in CO2 emissions in our economy but which would not disadvantage Australia’s export and import competing industries. This promise was repeated again and again by the Prime Minister in the lead-up to the election. He said that he would not disadvantage any of our export or import competing industries when he introduced a scheme, and the scheme would lead to significant and deep reductions in CO2 emissions. These were the expectations that were created and these were the promises that were given. This was the mandate that he had to tackle climate change in this country. Of course, that promise was repeated by many colleagues in the lead-up to the election, but since the election not one member of the government has dared to repeat that promise. They have not uttered the words that they will not disadvantage export and import competing industries.

As it has turned out, the government’s proposal is immensely complex. Of all the 50 or 60 industries that have come through my door, every one of them has a different scheme; every one of them has a different deal that is invariably unsatisfactory and invariably crippling. This is not a scheme to design one price of carbon; there are 50 or 60 or 70 or 100 prices of carbon because every scheme is different for every industry. This is a disaster. This government is in disarray on this program. This has been a mess from day one. This government scheme would seriously disadvantage our export and import competing industries and cost thousands of jobs. It will kill investment yet not produce any meaningful reductions in CO2 emissions. It fails on all counts.

Under the Rudd scheme, from year one Australian export and import competing industries will be effectively taxed an extra $2½ billion that they cannot pass on as they are price takers. This is in the face of a promise not to disadvantage export and import competing industries. Of the $12 billion that will come into the government coffers in year one, 44 per cent will come from trade exposed industries, but less than 25 per cent will go back to those industries as free allocations of permits. The difference is over 20 per cent, or around $2½ billion.

With our economy approaching recession—the Rudd recession—and much of it in recession already, jobs in many sectors will come under severe pressure with the introduction of this scheme. For many export and import competing industries in Australia, the design of the government’s emissions trading scheme will act like a reverse tariff. For these industries, we will be the only country in the world to effectively impose a carbon tax, a tax on industries that are price takers, a tax on industries that have no capacity to pass on costs not faced by their competitors, a punitive tax on industries that the Prime Minister promised not to disadvantage—$2½ billion in the first year. For example, Australia accounts for 0.6 per cent of the world’s steel production, but we will be the only country in the world to impose a carbon tax in the middle of the biggest world recession since World War II, according to the IMF. Even in Europe, all of the industries are covered until 2012 and there is serious talk of extensions for them all. Yet, we are talking about 2010 and a $2½ billion tax immediately on all of our export and import competing industries.

For many industries, a price of carbon of $25 per tonne of CO2 accounts for 50 per cent of their profits in good times and up to 100 per cent or more of profits in bad years. We could see a situation where companies will have to borrow to pay for their permits. Think about it: companies will have to borrow, in some cases, millions of dollars or tens of millions of dollars to pay for their permits. What banks in this current climate will lend tens of millions of dollars to pay for permits in the midst of the biggest credit crunch for 80 years? What is more, if we move too far ahead of the world, any cuts in Australia’s emissions will not necessarily have a global impact. Our aluminium and zinc industries produce 50 or 60 per cent less CO2 than similar industries in China and other countries. If we impose this tax and industries then move offshore, we could see a dramatic increase in global emissions. Not only will we cripple jobs in this economy, not only will we stymie our ability to rebound out of the recession that is coming, but we will in fact contribute to higher CO2 emissions around the world.

To rush the introduction of this scheme without knowing the outcome of the December 2009 global environment summit in Copenhagen, without knowing what President Obama will do and when—in fact the only budget allocation in the US system we have already seen for this is in 2012, some two years after we are supposed to be introducing it—and without knowing the impact of the global financial meltdown on our real economy is reckless in the extreme. We will meet the Kyoto target by 2012—one of only five countries in the world to do so. There is no need to rush into this if it is not ready. The government scheme is in disarray. Individuals who take action will make no contribution. Any families or any individuals who make contributions to reducing CO2 emissions will find that it only increases the capacity for industry to increase their emissions. The Treasury modelling was months overdue. It took no account of the financial crisis. It assumed that all other countries in the world were part of the global scheme. It was a useless piece of work. It is being used by the government purely as propaganda and as a prop to carry forward and not take any account of the discussions and negotiations that they have been having with industry. It is self-serving, it is misleading and it is irresponsible.

The government does not know if there are better approaches, because they forbid Treasury to look at other approaches. That is why we have had to set up a Senate select committee with the Greens to explore other approaches and complementary measures, and to see what else could be done in an effective way to reduce CO2 emissions without causing enormous damage to our economy. The Rudd scheme involves generating permit revenue of nearly $12 billion from year one—a massive increase in taxation. This will see a huge administration set up to churn billions of dollars back through the economy with the government picking winners as to who gets compensation and who does not. No wonder the Minister for Finance and Deregulation is here. He will have responsibility for another $12 billion of administration. We need to know how the government will effectively manage the churn that will take place of billions of dollars back through the economy. The government will be picking winners as to who gets compensation and who does not.

I predict that in the years ahead there will be no new resource projects in Australia that will get off the ground without companies coming cap in hand to the minister to get a quota of free permits from the government to make their investments competitive. It will foster a nanny state, a mendicant attitude. Already we are seeing investments being shelved by global companies which cannot believe that Australia would introduce a scheme with so much uncertainty, so much cost and so much disadvantage compared with our major competitors. Already we are seeing investment being killed.

When things in the world turn around, companies will look to invest heavily. However, they will not pour money into a jurisdiction where there is a cloud hanging over the long-term competitiveness of various projects and various industries. Australia will miss any upswing that is coming after what we are going through. We will lose a generation of investments. We are in the process of killing investments already with this proposed scheme that the government is putting before the parliament.

In many cases, also, the best placed companies to develop and fund the migration to cleaner energy processes, including renewables, are the big emitting companies themselves. Putting a big hole in the balance sheets of these companies will kill this opportunity. Stripping billions of dollars out of the balance sheets of companies to compensate households and to put money back into free allocations for some companies will strip the capacity of other companies and their balance sheets to do any meaningful migration to a more effective technology within their plants.

The government have little or no understanding of what is important in terms of investment in our resource sector and what has been important over many decades in the very strong position we have held as a country. On top of this, the government have made little or no attempt to consider the impact of the global financial meltdown on the capacity of companies to either administratively or competitively cope with the transition. If they had bothered to meet meaningfully with chief executives, they would have seen the great fear of companies as this financial meltdown has evolved, their great fear about their physical capacity to introduce what is going to be one of the biggest structural changes in Australia’s history into their operation in the middle of the worst financial meltdown in 80 years. You know it, Gary. You know it yourself. This is an impost which is going to cost Australia dearly in jobs, investments and finance.

The government’s scheme is in disarray. It is rushed and bungled. It is deeply flawed because it has been rushed to suit a purely political timetable. The design is not flexible enough to cope with the financial meltdown. The design of the Rudd scheme fails on all counts. It will cost jobs, tens of thousands of jobs. It will kill investment, which means future jobs, and it will do very little, if anything, to reduce CO2 emissions. No-one outside the government supports the scheme. Industry opposes it. The green groups oppose it. And there is substantial dissension within the government’s own ranks, within caucus and within cabinet, in opposition to this. With the design of the government’s emissions trading scheme, this government is legislating for unemployment. (Time expired)

Greg Combet (Charlton, Australian Labor Party, Parliamentary Secretary for Climate Change) Share this | Link to this | Hansard source

Of course, it is not the government’s policy position that is in disarray here; it is the coalition. Let us just start at the most practical level about the issue of jobs in the context of the current economic environment, because no-one can take the coalition seriously after they voted against the $42 billion Nation Building and Jobs Plan. Just consider what the coalition voted against. There was $12.2 billion for one-off cash payments to eligible families, single workers, students, drought affected farmers and others to support domestic demand and consumption in the economy that supports jobs. They voted against it. There was $14.7 billion in Building the Education Revolution for investments in education throughout the country, new infrastructure in every school to provide much-needed maintenance and new facilities—$14.7 billion that will support jobs in every community throughout this country. The coalition voted against it—against practical job initiatives. There was $6.4 billion to build more than 20,000 new social and Defence houses, practical investment in job creation throughout the country in the midst of the global financial crisis. The coalition voted against it. There was a temporary business investment tax break for small and general businesses to buy eligible assets worth more than $1,000, which will support job creation in the small business sector and support small business at a difficult period of time. The coalition voted against it. There was $2.7 billion for free ceiling insulation for 2.7 million households, acknowledged throughout the household insulation sector in the economy as something that is going to immediately create jobs. The coalition voted against it. There were significant increases in funding for local community infrastructure and local road projects. The coalition voted against them. They voted against all of those job creation measures. Neither can they let go of their commitment to the Work Choices legislation, another piece of legislation that was a job destroyer. The attack on protection against unfair dismissal alone led to many people losing their jobs.

They are a coalition that cannot be taken seriously on economic issues and on job creation. If they need any guidance to understand their current position in the polls, they need look no further than their position, their confusion and their disarray on the Nation Building and Jobs Plan that the government has prosecuted and the support for jobs throughout the economy; on industrial relations; and on climate change.

On that issue, let us get something straight, in answer to the previous speaker’s submissions. The government has released the exposure draft for the Carbon Pollution Reduction Scheme. It has followed an extensive process of consultation over a considerable period of time with industry stakeholders. For example, I have only just finished meeting with the Australian Coal Association, but of course my colleague the Minister for Climate Change and Water and many other ministers in this government and departmental officials have been meeting with industry stakeholders, environment groups and community organisations over the last 16 months to formulate the detail of this proposal, which is revealed in the exposure draft released by the minister yesterday.

A balance has been struck in transitioning this economy to ultimately lower emissions technology as well as protection for the environment. This is an issue in relation to which leadership is needed, not carping, and where tough decisions have to be taken. This government proudly stands by the work that has been done in the development of the Carbon Pollution Reduction Scheme, and in particular all of the work by the minister. We as a country need action on climate change to protect the environment and to encourage investment and jobs in lower emissions technology and the renewable energy sector. We need to support jobs in important industries that are severely impacted upon by the effect of climate change, like agriculture and tourism, we need to support jobs in emissions intensive industries as the economy transitions to lower emissions technologies and we need to show leadership in the international community on this issue. That is why the government has actively pursued the development of policy responses to climate change, and in particular the Carbon Pollution Reduction Scheme.

We will not as a nation achieve anything on this issue by doing nothing at all. The problem for the coalition fundamentally stems from the fact that they do not believe the science. It is accepted that 13 of the 14 warmest years on record occurred between 1995 and 2008. Australia has experienced warmer than average mean annual temperatures for 17 of the last 18 years. And yet they cannot accept that. The average temperature in Australia has increased by 0.9 degrees Celsius between 1910 and 2007 and it is projected to increase by one to five degrees Celsius by 2070 compared with 1990 levels. This is science that the coalition cannot accept.

The Australian Bureau of Agricultural and Resource Economics has predicted that if we do not act on climate change then exports of key commodities will fall by up to 63 per cent by 2030 and up to 79 per cent by 2050—that is, if we do nothing then we are going to lose jobs in those key parts of the economy. The CSIRO also estimates that if temperatures rose by just two to three degrees then almost all of the Great Barrier Reef would be bleached, putting $4.9 billion of tourism at risk—that is a lot of jobs that would go by doing nothing. The CSIRO has also estimated that if temperatures rise by just two to three degrees then 80 per cent of Kakadu’s freshwater wetlands will be lost to rising sea levels. This is just some of the scientific evidence and the conclusions that have been drawn that the coalition seems to struggle to accept. The underlying issue is this: if we take no action as a country, there are huge consequences for employment, economic activity and investment in this country—and action we must take.

But we do not see anything from the coalition in terms of a policy response to this. Let us not forget the fact that for 12 years no action was taken by the Howard government in response to climate change. The Howard government spent more on taxpayer funded advertising than they had budgeted to spend on tackling climate change over four years. The Howard government refused to ratify the Kyoto protocol. We have just heard the previous speaker, the shadow minister, nominate that Australia will meet its Kyoto targets. That is a pretty sound reason why the Howard government might have signed the Kyoto protocol. But no action was taken. They failed in 2003 to act on Treasury advice to introduce an emissions trading scheme—

Opposition Members:

Opposition members interjecting—

Greg Combet (Charlton, Australian Labor Party, Parliamentary Secretary for Climate Change) Share this | Link to this | Hansard source

At least they seem to have come to life over there. They gagged top scientists in the CSIRO from reporting on the impact of climate change in Australia. There are very curious views held within the coalition. For example, Senator Joyce was quoted in the Australian newspaper on 14 January this year as saying:

The view across the National party is that the reasons put forward to justify an emissions trading scheme are just a load of rubbish …

Senator Minchin, leader of the Liberal Party in the Senate, has said:

There remains an ongoing debate about the extent of climate change, about the extent of human activity’s role in the climate changing.

And later of course Senator Minchin made the observation: ‘Carbon dioxide I think is not a pollutant’. In a speech on 27 January this year Senator Bernardi said:

But exactly what is causing climate change and what—if anything—should we be doing about it should remain the subject of debate.

Plenty more quotes can be harvested but they all underline one thing: the difficulty that the coalition has in accepting the fact that we need to act on climate change—that there are sound scientific reasons why we need to act to protect the environment and to make the transition to a lower emissions economy.

It is fair to ask what is the coalition’s policy on this area, because it appears to be somewhat incoherent. The Leader of the Opposition, a former environment minister of course, is on the record as supporting an emissions trading scheme. We are now not sure whether or not that remains the case or what the Liberal Party’s position on an emissions trading scheme is. But it appears from the MPI today that there is opposition to the Carbon Pollution Reduction Scheme. Mr Robb, the shadow minister and the member for Goldstein, who spoke a moment ago, has posited a number of things. For example, perhaps a carbon tax might be the way to go. We do not know at what level the tax might be levied, what costs are involved, the complexity of it, what impact it would have and in particular how it is going to reduce carbon dioxide levels and carbon dioxide equivalent in the atmosphere.

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Change, Environment and Water) Share this | Link to this | Hansard source

Mr Hunt interjecting

Greg Combet (Charlton, Australian Labor Party, Parliamentary Secretary for Climate Change) Share this | Link to this | Hansard source

We have an interjection from the member for Flinders, the shadow minister for the environment. He is also on the record as clearly indicating support for an emissions trading scheme. In fact, to quote Mr Hunt from 17 July, he said:

… we support the idea of emissions trading. We proposed it … Basically what they’ve done is they’ve dusted off the document that we had …

That is an interesting contribution to the debate—and somewhat contrary to the MPI that has been moved today. The trouble with the coalition is that it is difficult to divine exactly what is going on. Some coalition members dispute the science. Some suggest a carbon tax is the go. Others support an emissions trading system. The shadow minister for climate change has indicated that perhaps 100 per cent of permits should be issued under an emissions trading scheme. I am not sure how you get a carbon signal in the economy out of that.

We do not know what the coalition’s position on targets is. In fact, the Leader of the Opposition has indicated that the five to 15 per cent target that the Commonwealth government has established is in fact a very significant target, yet others are suggesting, as we have heard in the contribution to date, that that target is far too stringent for the economy. So it is very difficult to divine exactly what the position of the coalition is. The trouble is that in this area important and strong leadership is needed to take action to deal with the effect of climate change. The coalition will face a very clear choice in the not too distant future as this legislation comes through the House and through the Senate. Will you support it or not? Easy question—we don’t know what the answer is.

For the government, there are very important foundations for the policy that is enunciated not only through the Carbon Pollution Reduction Scheme exposure draft legislation but for many of the other initiatives that we have taken. I have pointed already to the science. The policy responses include three main pillars, the first of which is the reduction of Australia’s carbon pollution levels, and the CPRS is the key policy initiative to address that. Our long-term target is to reduce carbon emissions on 2000 levels by 60 per cent by 2050, and the CPRS has associated with it a medium-term target of reducing emissions on 2000 levels by between five and 15 per cent by 2020. In conjunction with that and in particular to provide investment in certainty in the renewable energy sector, we are establishing a target of 20 per cent of renewable energy by 2020 to be supplied within our electricity market. We are also driving a clean energy revolution with policies such as a $500 million Renewable Energy Fund, a $150 million Energy Innovation Fund and a $500 million national Clean Coal Initiative—extremely important initiatives to underpin employment in that key part of the economy.

The second key pillar of our policy is to support adaptation to the impacts of climate change. This is especially important in agriculture and land management areas and tourism. We need to secure our future water supplies. We need to help coastal communities adapt. We are supporting our farming future by providing $130 million over four years to help primary producers adapt. We have established a $200 million Great Barrier Reef rescue plan and we are providing $8.9 million to support the Great Barrier Reef in the Climate Change Action Plan.

The third pillar of our strategy to address climate change is to help shape a global solution. We have ratified Kyoto, something the Howard government failed to do. We are playing an aggressive and constructive role in global negotiations to establish a new international agreement.

The Treasury has found in its modelling that countries that defer action face long-term costs that are around 15 per cent higher than those that take action now. By doing nothing, which is the position of the coalition, more jobs will be lost. We must act to support jobs in lower emissions technology. We must act to protect the environment. We must act to support jobs. (Time expired)

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Change, Environment and Water) Share this | Link to this | Hansard source

This scheme in this form at this time as presented by the government will send jobs straight to Shanghai. This is a recipe, a plan and a proposal which will send Australian jobs with Australian workers straight to Shanghai and in so doing will achieve the unique double of sending emissions to a higher emissions environment and raising global emissions. Jobs will go to Shanghai and global emissions will go up. However, we had this presented as a choice between action and inaction. That is the false dichotomy which our friends in the government would present and that is the debate which they would want. But they are flat, dead wrong. It is not a choice between action and inaction. It is a choice between job-destroying action and the impression of activity on the one hand and job-creating action and real reduction of emissions on the other hand. That is the difference.

We have a very clear plan. It is a plan of protecting the planet whilst protecting Australia. I will run through our four key planks. But I want to deal with the issue of jobs going straight to Shanghai first. To follow on from what Mr Robb, the member for Goldstein, has said, let me speak first about Sun Metals. I speak about them because they are on the record. Other companies have come to the member for Goldstein, the member for Groom, the member for Dunkley, the Leader of the Opposition and me but are not yet willing to speak on the record for fear of retribution.

Sun Metals employs directly or indirectly 450 people in Townsville. They make zinc. They smelt zinc. What they have said is that under this government’s scheme, because they will be competing against countries which do not have such a tax in exporting their materials to China, in exporting their materials to Asia, they will close and they will move their jobs to China. What will happen to those 450 workers in a global downturn? They will be unemployed. They will lose their jobs and the rest of Australia will have to pick up the price. And their jobs and their families and their livelihood will all suffer as a consequence. What will happen to global emissions?

Sun Metals produces about one million tonnes of CO2 equivalent per annum. When Sun Metals moves to China, because of the different processes and the different energy supplies, global emissions will go up from one million tonnes to two million tonnes for the equivalent body of production. That is one company. Visy is also on the record as saying that they will move two Australian paper recycling plants, probably to China, under the government’s emissions trading scheme. That is 160 jobs gone. The ludicrous situation is that we take our waste paper, send it to China, process it in China and it is then re-exported to Australia. That is truly an absurd exercise.

We mentioned Energy Developments today. Energy Developments harvests the waste coal seam methane gas. It uses that gas. It will probably save, on present estimates, as much in the way of emissions as the government’s entire $3 billion so-called energy efficiency program by 2020, unless of course the CPRS is applied to it. What we see from Macquarie Research’s note of 26 February is:

… the future is in the hands of the government.

The headline is:

CPRS outcome in June remains the key share price driver.

Further down it says:

ENE’s—

that is, Energy Developments, earnings are:

… under threat from a potentially poor outcome from the federal government’s Carbon Pollution Reduction Scheme.

The risk is that the government implements the white paper. That is what happens to a renewable energy company under the scheme. What we see is the destruction of Australian jobs in zinc, paper recycling and clean energy companies. They should be ashamed of themselves. Everybody in this House who believes in lower emissions and Australian jobs should think of Sun Metals, Visy and Energy Developments, because these are real companies with real jobs which are really going offshore.

What are the great flaws in their system? First, as the member for Goldstein set out, is the lack of a level playing field, which will see Australian firms burdened with a price that other firms in other countries are not and will see the export of Australian jobs and the driving up of global emissions when those jobs go to a lower emissions environment.

Second, what we see is the absence of green carbon, and I will deal with that in more detail in a minute. It is extraordinary that green carbon has been utterly left out of the government’s scheme. Whether it is Professor Flannery, Professor Garnaut, the National Farmers Federation, the Australian Farm Institute, the Australian Industry Group or the Business Council of Australia, all have called for the inclusion of green carbon in the scheme, yet it is left out of the government’s scheme. It is for one simple reason—they are using last century’s European model rather than this century’s Australian model. That is the difference. They are using a 12- or 13-year-old model which looks backwards and is not designed for Australia and does not maximise the savings of emissions we could make rather than using a model which would be right for Australia, which would save real emissions, which would improve our farms and soils and which would help Australia have lower emissions and to reduce those emissions at low cost.

The third of the key elements is the issue of timing. We have always said 2011 or 2012 for the simple reason that we are on track. We are one of five countries to be meeting their target and we are already delivering. But to drive the price of carbon up and to impose an impost on Australian businesses that are engaged in trade prior to other countries is to place a millstone around their necks. That is what we see from our friends on the government bench opposite.

What we have is a very simple proposition: we can protect the planet and Australia through four key planks or pillars. The first is that Malcolm Turnbull outlined a green carbon initiative. One hundred and fifty million tonnes of CO2 which would not be saved under the government scheme can be saved. It is less than one-sixth of that which has been outlined by Professor Garnaut and it uses soil carbons, biochar, revegetation of mallee and mulga, and forestry. It uses the 11 different elements which Professor Garnaut himself outlined but on a far more conservative basis. All of this is excluded under last century’s scheme, which they are trying to impose on Australia today. That is a disastrous model for emissions reduction, a disastrous model for costs within Australia and an extraordinarily lost opportunity for Australian farmers. Do not take our word for it; take the word of the National Farmers Federation, the Australian Farm Institute, WWF, ACF, the Australian Industry Group, the Business Council of Australia, the Australian Chamber of Commerce and Industry, and I can go on.

The second element of our proposal is a very simple one: we put on the table over a year ago the concept of a clean energy revolution, terminology which we see has been appropriated. That is fine. But what we will do under the clean energy revolution involves two parts. On the one side there is demand reduction—50 million tonnes of CO2 from energy efficiency on a per annum basis by 2020. Again, this element is entirely excluded under the government system. If mums and dads make savings at home through putting solar panels on their roofs, it will not make one gram of difference to the 2020 target under their system. Senator Wong set that out yesterday and conceded it. The other part of the clean energy revolution is what we will do with renewable energy, what we will do with clean coal and the two stations that we will build by 2020 as part of a broader clean energy revolution focused on solar, wind, tidal and geothermal energy.

Then we turn to the emissions trading scheme and the flaws I have outlined. We have said that there is a role for a price for carbon but not one done in a way which drives our exports out of Australia, drives our export businesses offshore and destroys Australian jobs. That brings me to the last element, the fourth plank or pillar. That is, we must have a real global agreement with China, India and the United States with real incentives for protecting the great forests of the world. That is the difference— (Time expired)

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

As I rise to speak on this motion, I reckon it should really be ‘the adverse effects of the coalition’s opposition to the government’s emissions trading scheme on employment and the economy’. The question is not only, ‘Will jobs be lost if we act on climate change?’ but, ‘How many jobs will be lost if we fail to act?’ That is the question that needs to be asked. We see the climate change sceptics on the other side obviously oblivious to what is happening to the climate in the world around us today. Perhaps it is because they are too focused on their internal party room brawling to actually take any notice of the climate around them or what has been said by the scientific community. Just as members opposite ignored for years and years—over a decade—the plight of the Murray-Darling Basin and stood by, watched its demise and did nothing, they similarly want to do the same when it comes to climate change.

There is a real similarity between the two issues. If you go back to their position with respect to the Murray-Darling Basin you will find that the now Leader of the Opposition had a view about what ought to be done, the National Party members in New South Wales and Queensland had another view, then the National Party members in Victoria had a third view about what ought to be done and, when you went to my home state of South Australia, the Liberal Party members there had a fourth view about how the system should be managed—in other words, they could not reach agreement on what they needed to do so they did nothing. That is exactly what is occurring right now when it comes to the issue of climate change. If you look at their track record on this issue you see it changes by the day.

A moment ago the parliamentary secretary quoted the member for Goldstein and others. I want to refer to—and I know that the parliamentary secretary did in his quotes—Senator Cory Bernardi, from my home state, who on public radio on more than one occasion has spoken on this topic. On 27 January he made a number of statements which clearly indicate that there is real division within his own party about where they stand on climate change. So in the face of disunity you do nothing because you cannot reach any agreement on what it is you have to do.

The Rudd government is not prepared to stand by and do nothing and jeopardise future generations in the face of overwhelming scientific advice. I refer to some of that scientific advice in the fourth assessment report of the Intergovernmental Panel on Climate Change. I quote from some very relevant parts in that report, and in doing so I point out that subsequent to this report being written the scientific community has in fact upgraded it and made it absolutely clear that these are conservative positions in the light of what is known today. The report says:

• There is now no question that the climate system has warmed.
• It is very likely that greenhouse gas emissions related to human activity caused most of the warming that has been observed since the mid-20th century. In their third assessment report in 2001, the IPCC had only considered it likely.

Now they say there is no question—

• Global climate change over the past 50 years is extremely unlikely to have been caused by natural variability alone.
• If greenhouse gas emissions continue at or above the current rate there will be further warming, and the changes that we will see during the 21st century would very likely be larger than those observed in the 20th century.

It goes on to say:

• Global sea level rose during the 20th century by 12-22 cm. By the end of the 21st century, sea level is projected to rise by 18-59 cm—

I could comment about that further in light of some of the evidence given to the Standing Committee on Climate Change, Water, Environment and the Arts by some of Australia’s leading scientists. I will come back to that if there is time. The report goes on to say:

• The increases in greenhouse gases since 1750 are due primarily to emissions from fossil fuel use, agriculture, and land-use changes.

In other words, from man-made activities, and—

• Extreme climate events such as heatwaves and heavy rainfall are very likely to become more frequent.

Governments have a responsibility to act, and to act on the best possible advice they have before them. That is exactly what the Rudd government is doing. The risk to jobs and the Australian economy is to not act on climate change—to do absolutely nothing—which is exactly what the opposition would have us do. I repeat what the parliamentary secretary said: jobs that already exist in this country are at risk; jobs like the 63,000 jobs associated with the Great Barrier Reef and the $5.8 billion industry it sustains in tourism, in recreation and in commercial fishing.

Thousands of jobs are at risk, many of which we have already lost in the Murray-Darling Basin and in other agricultural areas. Those jobs are real jobs that are in place right now but which may be lost before our very eyes because we sat back and did nothing. The livelihoods of the people in Queensland are at risk, as we saw in recent times through floods and cyclones. Those extreme weather conditions have been predicted by the scientific community. They are not just something we should put up with and pretend we did not know were likely to occur. Those extreme weather conditions affect not only jobs but the future economic viability of this country. That is why we need to act, because if we do not there will be jobs at risk and there will be an impact on the economy of this country to the tune of tens of billions of dollars.

On the flip side of that: there are jobs in transitioning to a green economy, and we have already seen those jobs created in a range of sectors. Just look at how many jobs today have been created in the solar panel industry. If you go around Australia and collectively add up those jobs you will see that they run into thousands. If you look at the number of jobs that in recent years have been created in the water and irrigation industries as a result of transitioning to a smarter economy, again, you will find thousands of jobs. If you look at the home insulation program that the government announced as part of its $42 billion package—which I might say members opposite opposed—4,000 jobs are expected to be created in that sector, if you listen to Dennis D’Arcy, the chairperson of the Insulation Council of Australia and New Zealand. He said:

Clearly our members have a direct interest in the package which will create around 4,000 jobs…

There are jobs already being created and there will be more jobs created as we transition to a green economy.

With respect to transitioning to a green economy, Treasury modelling released in October 2008 demonstrated that economies that defer action face long-term costs that are around 15 per cent higher than those that take action now. In other words, for every day and every year that we delay, the cost to implement a responsible strategy will be more expensive. The Treasury modelling also says that the global market for environmental products and services is projected to double from US$1.3 trillion per year at present to US$2.74 trillion by 2020. Those figures were cited in a United Nations Environment Program Report in 2008. In other words, there is a huge industry out there waiting to be developed as a result of transitioning to the greener economy.

Let me say that it is interesting that, in America, President Obama has committed to a scheme being implemented in his country. I want to quote him:

… to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy.

He said that in February 2009. That was only last month. That is how recently he committed to doing something in the USA.

It is also interesting to note that, whilst the opposition members say that we should be doing nothing and holding off, 27 European countries, 28 states and provinces in the US and Canada, and New Zealand are all looking at implementing, if they have not already done so, a similar scheme. They are prepared to take the lead on this, but we are being told that we should not do it. Well, that is not the position of the Rudd government, because the Rudd government is acting responsibly to ensure our kids and future generations are not left to clean up our mess.

I want to make a couple of other comments in respect of comments made by previous speakers the member for Goldstein and the member for Flinders. They said that we are rushing the scheme. (Time expired)

Mal Washer (Moore, Liberal Party) Share this | Link to this | Hansard source

I would like to make it very clear that all the speakers I have listened to so far certainly agree that global warming is a major issue. It is not just global warming. If I could diverge for a second, the anthropogenic effects of CO2 are very dramatic, particularly in Antarctica in terms of acidification. Already the aragonite or calcite-type shells of the microscopic creatures are being dissolved, and the barrier is now rising rapidly to above one kilometre deep, which will affect the food chains of the krill, hence those of the whales, the seals and the penguins et cetera. The Barrier Reef was mentioned. There is no doubt that the concentration of ultraviolet light combined with warmer waters is destroying the plankton that work with the coral, causing coral bleaching. The Arctic is undoubtedly melting and Greenland is also having major problems. No-one disagrees with that, and the member for Makin must understand that. He is a friend of mine, and I want him to be assured that we empathise with the position.

However, we have to remember that Australia now emits less than 1.4 per cent of CO2 equivalent emissions, and we need to work as part of a global action if we are going to have any definite effect and change things. The emissions trading system that you have, unfortunately, is flawed. I am not saying it would easy, but it is flawed. As already mentioned by the member for Flinders and I think by the member for Goldstein, it is counterproductive to what people do as individuals. Here, we need to empower not only governments on an international level but also individuals on an individual level. If an individual does things, it literally flows on to help the polluters in their credits. Our export and import industries will be affected. We estimate that from year one an extra $2.5 billion of tax will be put on them, and yet many of these industries are currently very efficient. For example, the aluminium industry in Australia and the zinc industry, which has been mentioned before, emit only 50 to 60 per cent of the CO2 equivalent here in Australia as compared to China.

The proposed scheme involves generating permit revenue of about $12 billion from year one. New Zealand was mentioned by the member for Makin, and, Tony, I want to tell you that 100 per cent of the permits issued in New Zealand will be free until 2018-19. It is very much different from Australia. The problem of the $12 billion generated is now part of another government problem. The global financial meltdown must be considered, as the ability of these companies to source the finance to buy or borrow the $11.5 billion worth of permits, as the member for Goldstein mentioned, is problematic. It is made worse by the credit crunch but it is made far worse by massive government borrowing. When the government borrows and raises bonds of some $200 billion, no-one else can borrow the money. My money will come out of the bank and go into your bonds. The same bank will invest in your bonds. The pool of resources for private enterprise to borrow from is evaporating and already they cannot borrow. You have turned a fiscal stimulus into a fiscal disaster.

Basically, this is the worst crunch that we have had in 80 years. The scheme that was proposed has got very little relativity to reducing the CO2 emitted, and a 20 per cent reduction in Australia’s emissions by 2020, which we have proposed, will reduce the global emissions by 0.2 per cent. In other words, we will reduce the global emissions from 57.2 gigatonnes equivalent of CO2 to 57.06 gigatonnes equivalent of CO2. For bankrupting an economy, that is not a big gain. We must have a scheme, of course, and this needs to be calibrated with progress towards a global agreement. At the same time we must encourage greater individual participation, which this pollution scheme does not. The Kyoto agreement does not finish until 2012. The government wants to start the scheme by 2010. The business costs are absolutely horrific. We do not meet in Copenhagen until December 2009, so we should not lock ourselves into any firm agreements until after that date. The minerals sector, for example, will be seriously affected by— (Time expired)

Jennie George (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

Today’s MPI shows yet again how hopelessly divided the opposition are on the very fundamental issue of climate change and its causes, let alone how we deal with it and what our response should be. Now it seems that, if one is to take the proposition literally, they are against an emissions trading scheme. Yet it was not too long ago that the Leader of the Opposition was claiming credit for the Howard government’s promotion of an ETS, and I recall the shadow minister was also in that category. But it seems today not only that we cannot get one line of reasoning from the opposition as to the science of climate change but also that they are all over the place insofar as an ETS is concerned. I point out to the member for Flinders that the ETS is only one of a suite of measures that the government will have in place to deal with the issue of climate change. There are other measures to do with energy efficiency and advances in technology that are part and parcel of our response.

The problem for the member for Moore and others who genuinely understand the science of climate change is that they have an opposition bench full of climate change sceptics. Well known in that regard is the member for Tangney, who has long proclaimed his scepticism about the science of climate change and the contribution of human activity to it. Very recently, the Nationals, in Senator Barnaby Joyce, had this to say:

The view across the National Party is that the reasons put forward to justify an emissions trading scheme are just a load of rubbish.

The member for Groom, who was smiling at the table just 10 minutes ago, has form on this issue, dismissing the Al Gore documentary An Inconvenient Truth as ‘just entertainment’. The only sense I have heard in the debate has been in the contributions of the member for Moore and the member for Sturt, who is not often known for wise contributions. However, on this occasion he said:

We—

meaning the opposition—

need to embrace the reality that climate change has occurred.

Hallelujah! I wish the member for Sturt, the member for Moore and others who have sense on this issue all the best in their aim to try and convince the sceptics among their ranks that climate change is indeed happening. If the opposition cannot agree on the fundamentals, it is no wonder that they cannot agree on what response there ought to be.

Let us look at today’s MPI. The opposition claim that our proposed scheme will have adverse effects on employment and the economy, as if we had not taken those factors into consideration in devising our scheme. There are a few fundamental truths that I think shadow ministers need to comprehend in this debate. First of all, in the words of Sir Nicholas Stern:

Climate change is … the greatest market failure the world has seen.

When we have market failures, such as the one we are witnessing now in the global financial crisis, there is an important role for government to take action. That is what we intend to do, because all the science and all the economic analysis tell us that taking early action costs less than delaying action. As those of us who believe in the science of climate change know, delay means risking irreversible consequences. If you do not believe me, have a look at the Treasury modelling, which shows us quite clearly that we can sustain economic growth while at the same time reducing carbon pollution. Their modelling shows that annual economic growth will be only marginally lower with an ETS—they calculate it at one-tenth of one per cent.

As for the opposition’s claim that we have not taken into account the employment impacts, let me say, as a member representing a region heavily reliant on the export of coal and steel, nothing could be further from the truth. Our ETS will provide substantial assistance to support today’s jobs. In that regard, we are mindful of the possibilities of carbon leakage. That is why we have corralled today’s employment and today’s jobs against that possibility. How are we going to do it? We are going to do it by giving particular consideration to emissions-intensive trade-exposed firms. Firms like BlueScope Steel in my region, along with many others, will be entitled to the allocation of free permits. Many of them are likely to be at the 90 per cent assistance level. In my region the proposed coal sector adjustment package will help tackle the issue of high fugitive emissions in some of our local mines. We are committed to a substantial investment in clean coal technology, realising the importance of that. We will also have a climate change action fund to assist regions like mine in the transition. So we are mindful of the jobs of today while planning for the low-pollution jobs of the future. Again, I point to Treasury estimates that that sector will grow. (Time expired)

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Order! The discussion has concluded.