Christine Milne (Tasmania, Australian Greens) Share this | Hansard source

I would like to add a few comments in relation to climate change reporting. As everybody is aware, even a five per cent target will not be achieved with direct action, but it in the next few years we are going to see Australia have to agree to much higher levels of emission reduction, especially in the negotiation of a 2015 treaty to take effect after 2020. That means that if you are not going to go with a market mechanism, you are going to have to end up spending an awful lot of money in order to buy emission reductions—especially if you are going to only do that in the Australian context. That is why, by 2019, you are going to see huge impacts on the budget from having to cough up billions into the government's preferred direct action. The only way you are going to see a projection of that in that kind of time frame is to put in a report not only the impacts of climate change on the Australian economy, but also the impacts of climate policy on the budget generally. That is why we have an intergenerational report which comments on changes to demographics over five years, and the next one is due out next year in 2014.

Next year's intergenerational report will report on the projected costs out to 2019. There will also be an undertaking that details regarding government spending on climate change and the extent to which this contributes to debt will be included in the debt statements in the budget, MYEFO and PEFO. It is going to lead to much more significant reporting around how much direct action is actually costing, compared with what an emissions trading scheme would cost—and, as we know, one of the issues with the emissions trading scheme is that if you bring it forward to flexible pricing in 2015, as Labor would have us do, it would be a $4 billion hit on the budget that year which has to be accommodated somehow. I think that is one of the things that people are starting to realise. If you are going to address climate change in a way that is appropriate to the science, it is going to be massive emissions reductions. That is why it makes no sense to have those emissions reductions funded by government, especially since government is resisting regulatory change.

In the United States they have gone down the path of regulatory change, not because they think it is superior to emissions trading or a market mechanism, but because President Obama was unsuccessful in trying to get market mechanisms. So they have gone down the path of regulatory change, particularly with power station emission standards. But, if you are going to go down this path of funding emissions reduction from the budget, it is going to cost big time and we need to see where and how that money is going to be found, especially since there is no appetite for increasing revenue—which is where the government is failing again in terms of the mining tax—and that is one of our strong arguments around why you would be mad to get rid of an emissions trading scheme at the moment. It is quite important that those figures are made quite specific and are not just what has been spent in a budgetary sense in the last year, but also what is projected to be spent over coming years.