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

I think we are going around in circles here because you are asking me a yes or no question when there is not a yes or no answer. You are asking a question about a range of assumptions behind a very complex modelling exercise—all of which were released publicly and in relation to which the government modelled a number of reduction targets. Yes, there were assumptions made about United States action—just as there were assumptions about China’s actions, India’s actions and so forth—because you have to do that in order to get some sense of what the likely carbon price is. It was a highly complex and sophisticated process that was gone through, and it was quite transparent.

If the question is, ‘Did the modelling assume a cap and trade system being in place in America by a certain time?’, then of course that is not how it would work. The assumption is not what the mechanism is; the assumption is that the nation will take action. And they may do it by other means. In fact my recollection is that there has been some suggestion in domestic politics in the US that the EPA would utilise its powers to regulate industry so as to effectively impose an emissions reduction policy if the cap and trade bill does not proceed. So, Senator Joyce, if your question is, ‘Did we assume certain nations had a CPRS?’—to use your first intervention—then the answer is no. We assumed that nations would take action. There were different times assumed for different nations, which is logical—of course what the US does is going to be different to what China does—but we did not assume, and I might be corrected here, any specific policy mechanism to drive that change.