Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Hansard source

I would like to contribute to the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 and the 10 related bills. Here we are with one of the coalition's first real orders of business. It is not about creating something, about instituting a new reform or about legislating for the future direction of this country. There is no coalition agenda to be set—no vision, no real substance and no real leadership. The No. 1 priority for them is not even about amending another policy or scheme. Instead, it is about repealing hard-fought legislation and recklessly hacking away at the progress the Labor Party has made on reducing emissions, transforming our economy and encouraging renewable energy.

I have spoken in this chamber on numerous occasions about how it is so much easier to tear a policy down than it is to innovate, consult and devise a solution that is in the long-term interest of Australia. So it should come as no surprise to anyone that the coalition has set its sights on dismantling clean energy legislation. In doing so, they are pandering to base fears in the electorate that they have cynically stoked through their own short sighted agenda.

This government promises to be the most uninspired, contemptuous, reactionary and downright narrow-minded one that Australia has witnessed in quite some time. This is just the first chapter, so settle yourselves in for what promises to be an entirely disappointing ride. We have known for some time that the Abbott government is intent on scrapping what it calls a 'toxic carbon tax'. Shortly after the election, the Prime Minister released draft laws to abolish the price on carbon and warned that Labor needed to repent in its support for this policy.

Even though it is now in government, the coalition has continued to go on the attack, employing the same mindset and strategies employed whilst in opposition. The new member for Bass has frequently attacked my stance on this issue, claiming that the carbon tax must go, for the sake of jobs and growth. But, as I have pointed out, carbon pricing and its associated benefits for renewable energy actually have the potential to enhance Tasmania's future economic prospects. But on a broader point, his comments are reflective of a conservative mentality that does not fully understand why using a market mechanism to restrict carbon emissions is so important.

The coalition forget that, prior to the federal election, the then Prime Minister Kevin Rudd, announced a plan to fast-track Australia's transition from the fixed price on carbon, which is what we currently have, to an emissions trading scheme. An ETS is an example of a flexible price-trading system on carbon emissions and is being used in numerous countries around the world today.

Whilst many commentators claimed at the election that Labor were confused about how to respond to the coalition's draft legislation, our shadow environment minister, the member for Port Adelaide, actually clarified Labor's position perfectly when he said:

We took to the election a commitment to terminate the carbon tax, as it happens on the same date that Tony Abbott intends to terminate the carbon tax on the 1st of July next year. But we also took a very strong commitment that in place of the carbon tax we would put an emissions trading scheme, a scheme that has a legal limit on carbon pollution and then lets business work out the cheapest and most effective way to operate.

This is why we decided that we would absolutely not back the repeal of carbon pricing if it were not going to be replaced with an ETS. This clarification and other statements from senior Labor leaders were of course ignored by the coalition, which has relied on the simplistic mantra of the price on carbon being a 'great big new tax' to characterise its preference for direct action on climate change—but more on that in a minute.

Throughout his reign as opposition leader and now Prime Minister, Tony Abbott has consistently stunned observers with his ignorant comments concerning climate change policy. The most notable example occurred in July last year, when he told open-mouthed reporters in Sydney that the carbon pricing policy generally was 'not a true market'. In fact, he went a step further and clarified his statement as follows:

It's a market, a so-called market, in the non-delivery of an invisible substance to no one.

I will let that hang in the air just for a moment so we can revisit once again how stupid a statement it was. No comments from the leader of a major Australian political party have been more misguided, arrogant or ignorant in living memory. The reaction by commentators in the media was, at first, stunned silence, followed by a close look at just how silly these remarks really were. Giles Parkinson summed up the thoughts of many best when he said:

Abbott's comments, parroted or not, suggest firstly that this Rhodes scholar who studied for an economics degree does not understand financial markets. They are full of commodities traded in their trillions but never actually delivered, be they invisible substances such as natural gas, or very visible products such as cattle and pigs.

It is little wonder that an ETS is not coalition policy with a leader like this in charge. At first, I assumed that the Prime Minister had dreamed up these observations in the shower that morning, but now it turns out that he may have actually been trying to tap into the type of language that has often been used on climate change deniers' blogs. I do not make it a habit to surf around sites such as the Galileo Movement most evenings, but apparently they frequently refer to carbon emissions being 'odourless and invisible' and, therefore, they seem to suggest, kind of harmless.

I will leave you to form our own conclusions about the merits of such beliefs that can be found on the internet. What we instead need to do is focus on the relative merits of the Labor and coalition policies and determine which party has the ideas and insight to achieve the aim of meeting vital emissions reduction targets. As Tony Wood, energy program director at the Grattan Institute, pointed out in an opinion piece in the Financial Review prior to the election:

The emissions reduction targets of both sides—

Labor and the coalition—

are the same. Both accept that Australia must contribute to the long-term objective of keeping global average temperature increases to less than 2 degrees.

The debate should now be which policy is likely to achieve the target most efficiently and which prepares Australia for the long haul of addressing the climate change challenge.

Let us not focus on three word slogans; let us actually compare the policies. First, let us examine the coalition's plan to dismantle carbon pricing and enforce its 'direct action' climate change policy. For those who have not delved into this scheme in any great detail, I will save you the suspense—it is not great. In fact, it is far from great because it not only would be quite ineffectual in practice but also promises to be quite expensive. This is rarely a combination that policy wonks reach for when devising a substantial and sophisticated policy blueprint.

Direct Action basically involves encouraging businesses to cut emissions via government grants—it is focused on buying emissions reduction. As part of this, emissions targets would actually be entirely voluntary. By voluntary, I mean that all Australian polluters will be completely free to ignore the direct action Emissions Reduction Fund. There will be no penalties for doing so. As a result, there would not really be a strong incentive for businesses to eliminate carbon based emissions beyond the perceived value of the grants. It will not cap Australia's carbon emissions and no credits will be traded on a market. Instead, polluters will basically be paid to, hopefully, pollute less than they otherwise would.

Indeed, one of the more widely discussed flaws inherent in this scheme is that the direct action policy will not really be orientated towards any particular baseline. The Minister for the Environment has indicated that targets will be measured from a baseline calculated according to a polluter's emissions over the previous five years, as sourced from the National Greenhouse and Energy Reporting Scheme. But, as Lenore Taylor and others noted, the policy will be available to many polluters that do not report to the NGER.

There is also the matter of cost. A key component of the scheme involves a giant fund to pay for companies and landowners to institute measures like soil carbon capture and coalmine gas projects. The problem is that it will take an extraordinary amount of money, over $2.5 billion in fact, to achieve the objective of reducing emissions by 160 million tonnes from 2000 levels. This means that under Direct Action it will be near impossible to meet the agreed upon renewable energy target of a five per cent cut in greenhouse emissions by the end of this decade. The closer one looks at the fine print of this scheme, the worse it looks. In fact, there may be some hesitancy for the coalition to continue with this policy for years to come. As the member for Wentworth noted in 2011, such a scheme that relies on taxpayer money to reduce emissions would:

… become a very expensive charge on the budget in the years ahead.

Let us compare that policy with a fixed price on carbon transitioning into a full ETS that features a flexible market mechanism. This holds several distinct advantages. It fundamentally alters how businesses consume energy. A price on carbon, whether fixed or flexible as part of a trading scheme, uses the competitive forces of the marketplace itself to make Australia less reliant on carbon emissions. This is not necessarily because private enterprises have undergone an ideological transformation about the impact they are having on the planet. Rather, the pure calculus of how to meet their energy needs has been superficially adjusted in favour of renewable energy, because this is what pricing carbon is designed to achieve—a transition from a reliance on carbon emissions to greater use of newer, cleaner technologies.

Without carbon pricing many experts fear that there will not be the same investment in renewable energy and that projects will not reach their full potential. Australia will fall behind as other countries take advantage of innovations in renewable energy that will define energy consumption in the 21st century. I do not know how to put it more simply: if we don't act, others will. It is also worth pointing out that mechanisms like an ETS actually involve less government intervention than a direct action policy. This is because the government is not subsidising the scheme or directing where resources should be dedicated. Rather, businesses will have a distinct incentive to do this themselves because the market will dictate that it is cheaper to do so.

Pricing carbon has come under a lot of criticism, but it is important to remember that big reforms that tackle longstanding problems are never easy. In his much admired book, Adapt: Why Success Always Starts with Failure, Tim Harford explores how the process of innovating to combat climate change can be so difficult. But, as he explains:

… a carbon price has to be the centrepiece of any policy on climate change. A price on carbon acts in more subtle ways than any regulator will be able to, encouraging a switch away from coal and towards … renewables, encouraging energy efficiency in every choice we make, and in the last resort, encouraging us to do without products, services and activities where the energy cost is just too high.

It is a system that guides decisions through the most effective of deterrents—cost.

So, why then, many people ask me, is the Abbott government so intent on repealing the price on carbon and so opposed to an ETS? The answer is probably the same one that we can attribute to the Prime Minister's stance on a range of issues—because it is easy and it pays politically. He and his top advisers have obviously sensed an opportunity to tap into an undercurrent of suspicion that persists in some sections of the Australian community when it comes to climate change policy. Linked to this is the reality that he would not have his current job, with its perks of repealing legislation and being seen riding his bike everywhere, were it not for his very stubbornness on this issue.

If we take our minds back to 2009, we may recall that it was only a bizarre sequence of events that allowed the Prime Minister to assume the leadership of his party in the first place. At the time, he was not an odds-on favourite; he was not even a favourite. In fact he was not even really taken all that seriously until an incredible internal battle erupted in the Liberal Party leadership. This revolved around the then opposition leader, the member for Wentworth, and his insistence on supporting the then Rudd government's planned ETS. Or it may simply be that the Prime Minister just is not convinced, that he is genuinely distrustful of the science behind climate change, that he has not been persuaded by the overwhelming bulk of peer reviewed, expert academic literature which counsels that climate change is man-made and very real. This is the most alarming answer of all, but there is a wealth of evidence to support it. As the member for Wentworth pointed out in one of his more candid moments of 2009 via a blog, and I quote directly:

… the fact is that Tony and the people who put him in his job do not want to do anything about climate change. They do not believe in human caused global warming. As Tony observed on one occasion "climate change is crap" or if you consider his mentor, Senator Minchin, the world is not warming, its cooling and the climate change issue is part of a vast left wing conspiracy to deindustrialise the world.

I think the previous speaker backed up my argument here. Bear in mind that these were not the words of a university undergraduate after a few too many coffees. These were public comments made by a man who is a key part of the Prime Minister's own cabinet as Minister for Communications, a man whose views on climate change are respected everywhere, it seems, except within his own party.

Evidence abounds elsewhere as well. When interviewed on ABC's Four Corners in August 2010, the now Prime Minister was asked if he still questioned the science behind climate change. He responded by stating:

Sure, but that's not really relevant at the moment. We have agreed to get a 5 per cent emissions reduction target.

It is not really relevant? I am afraid the question of whether you are sceptical of humans being responsible for climate change is relevant. It is perhaps more relevant to your policies on combating climate change than anything else. It is relevant because the question of whether or not someone considers human induced climate change a real thing informs just how that person will confront the problem if given the steering wheel of a First World country. Scientists are so united on the view that human induced climate change is real that labelling such consensus 'crap' and hedging on whether the science is settled is irresponsible. It is the same as ignoring all medical evidence and opposing the immunisation of children because of a fear of health risks such as asthma or autism. That is all there is to it!

Yet here we are with a Prime Minister intent on a direct action policy—a policy that is at best very expensive, mostly uncosted and mildly ineffectual and at worst completely ill-suited to developing an economy which can reduce carbon emissions in the long term. What must be particularly demoralising for Liberal Party moderates is that it does not have to be this way. The Liberal Party does not have to be a party that is opposed to scientific consensus and it does not have to be a party that trashes the idea of an ETS.

The entire situation must be particularly depressing for the current Minister for the Environment. This is a man who wrote a thesis at university which argued that a pollution tax on carbon emissions would enable governments to exert greater control over our environment. After entering politics, he, like many other senior coalition figures over the last decade, publicly championed an ETS. He is an educated person and, by all accounts, an insightful and intelligent thinker. But he has managed to ignore his best instincts, ignore the science and ignore his responsibilities as senior minister and fight for Direct Action. It is not because he knows it is the right thing to do in the national interest, but because he saw the way attitudes were shifting in his own party and he wanted to advance his career.

I would say to him that climate change policy matters and that he should consult Wikipedia on the subject if he is confused. If he types in 'emissions trading', he will find that different versions of an ETS are being employed around the world, including in the European Union as well as in parts of China and the United States. I certainly hope that some senior members in the coalition party room are reconsidering the party's position, because we are running out of time to act on climate change. I believe that many of them know that to be true. I think it is short-sighted of this Prime Minister to lead a party that is actually continuing to deny the science and the facts that are there. He is not prepared to show leadership on this very important policy.