Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Hansard source

I thank Senator Allison for her question. First on the issue of the NETT’s modelling. I am aware of that and I make the point that what an emissions trading scheme can achieve in terms of abatement of emissions obviously is dependent on what your trajectory is. We have made clear that this will be a cap and trade scheme—and Senator Allison has a long history of interest in these issues—and the design of the cap and trade scheme is that the government makes a decision on what is the level of emissions up to which it issues permits, thereby setting a cap on the emissions across the economy.

As I have repeatedly said, the issue of what that trajectory will be is something that the government will take a very careful and methodical approach to. We will take a very careful approach because we understand that this is a significant reform, hence the economic modelling that has been undertaken, hence the Garnaut report which obviously will canvass a range of issues, as has already been flagged in Professor Garnaut’s interim report. Obviously, also, we will consult with the community and with industry. So we are very clear that we will set the appropriate trajectory and we will do so after consideration of all of these matters and after the release of the green paper.

In terms of energy efficiency, the senator is right; there are potentially gains to be made through energy efficiency. These are matters which the government is working on. Certainly the relevant ministerial council, I am advised, in the past has previously looked at these issues, and these are issues which are being addressed in the context of the climate change and water subgroup of COAG, which I chair.

I suppose the emphasis that I would make for Senator Allison is that there are a great many policies which have to be put in place to ensure that we achieve the lowest cost shift possible to a low carbon future. That is what the government is focused on. The government will ensure that we take this reform methodically and carefully and we will do so with a very clear eye on securing Australia’s ongoing economic prosperity. As I have previously outlined, the scheme will include measures to assist households, particularly low-income households. We are very mindful of these issues. As I previously went through in answer to a question from Senator Brown, there are a number of policies which the government is implementing to achieve abatement. Emissions trading is at the heart of our approach to reducing Australia’s greenhouse gas emissions but there is obviously a range of others, the renewable energy target being one of them.