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

I am not an economist, but I think the first proposition that is important to recognise is that we are delivering assistance, as I answered to Senator Williams, through the tax and welfare system. The relative price signal will still be there. In other words, people will still face an increase in their energy costs of the amounts I have spoken about. We will offset that for a significant number of Australian families through the tax and welfare system, but the relative price will change. I know white certificates have been discussed, but the most recent consideration by the International Energy Agency in fact suggests that white certificates may not be the most effective way of achieving energy efficiency measures. Obviously, there is more work to be done on energy efficiency. The government has made some steps on energy efficiency through Minister Garrett’s portfolio and the COAG agreement, but there is no doubt that is one of the, I think you would call it, complimentary policy areas that we will need to continue to work on in the years to come, because that is a source of abatement and reduction in emissions, and it is obviously lower cost.

The introduction of a carbon price to include some of the costs of climate change into our economy is an important way of starting to give that signal. Right now, as you know, we do pay the costs of climate change—they are just not visible in the same way. They are not visible in terms of the prices that businesses face. The costs and the economic decisions and investment decisions a business makes do not have the costs of climate change visible. We think it is important to have that, because that is how you actually start to change how your economy operates.