Anne Urquhart (Tasmania, Australian Labor Party) Share this | Hansard source

I rise to speak in the debate on the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 and related bills. Labor will not be supporting this legislation. Yesterday morning, a large number of young activists participated in an event on Parliament lawns. Members of the Australian Youth Climate Coalition braved the Canberra cold to say, 'Your Choice = Our Future'. It is your choice, Senators, to stand up for the future these young Australians so desperately want: a future where their country, where our country, is a global leader in clean energy; a future where Australia has a strong, robust emissions reduction mechanism, a legislated emissions reduction target, and where Australia is seeking to advance a pathway to a global agreement. It is up to us—76 Australians from some of the most diverse backgrounds—to put our differences aside and find a way forward on this issue.

No one party was given a mandate at the Senate election last September. It has been four months since the government's first failed attempt to repeal the carbon emissions reduction mechanism and replace it with nothing. It has been seven months since the Environment and Communications Legislation Committee reported on this suite of bills. The committee's first inquiry into these bills was quicker than Labor senators would have liked, but the committee undertook the full process of calling for submissions and allowing for public hearings. As was canvassed earlier today, the government did not allow the full process to be undertaken.

Despite the Senate listing the reporting date for the second inquiry as next Monday, 14 July, in quite a desperate act government senators on the committee used their majority to refuse requests from opposition senators to call for submissions and hold public hearings. This is despite there being ample time last week and, with the leave of the Senate, this week to hear from witnesses who could provide the committee with an update on the effectiveness of the carbon price, and to hear from witnesses about similar mechanisms around the world.

The government's report on this inquiry is barely a page long. It is so short that I am going to read most of it into Hansardso that those at home listening can hear how farcical this government is in the first week of this new Senate. The report states:

On 26 June 2014, the Senate, on the recommendation of the Selection of Bills Committee, referred the provisions of the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 [No. 2] and associated bills to the Senate Environment and Communications Legislation Committee for inquiry and report by 14 July.

It says 'for inquiry and report', yet no inquiry was undertaken. Why? Because the government senators could not be bothered. They did not want to hear new evidence. They did not want to examine how the carbon price is working to cut emissions. And, today is just 8 July; not 14 July. The report does not detail why these bills need to be brought on today. The report goes on:

The committee notes that these bills contain identical provisions to those referred to the committee by the Senate on 14 November 2013.

Following a full inquiry, the committee tabled its report on this inquiry on 2 December 2013.

Therefore, the committee has resolved to reiterate the previous report of the committee on bills with identical provisions.

The committee reports accordingly.

That is it—3½ paragraphs, and not a mention that opposition senators sought only a one-day hearing, not a mention that opposition senators wanted only one day of government senators' time to enable examination of the new information on the bills. No, the government just wanted to rush these bills through, to fulfil one of their three-word slogans and rid this place of any action on climate change.

While the coalition are desperate for the parliament to pass this bill and associated bills, they refuse to bring the Carbon Farming Initiative Amendment Bill 2014 into this place this week. In fact, looking at the schedule of work for the Senate, the bill is not due until late August! Those opposite would have this place repeal the carbon price mechanism and leave the country with nothing in its place potentially for months.

The coalition announced its direct action policy in 2010. There has been limited information provided about the policy since this announcement and very little support for the policy from within the science and economic communities. The direct action policy includes a number of elements, all asserting to contribute to Australia's emissions reduction target of five per cent on 2000 emissions levels by 2020. The elements of direct action include extending the carbon farming initiative, planting 20 million trees, establishing the Green Army and the so-called centrepiece, the Emissions Reduction Fund. The Emissions Reduction Fund is based on a reverse auction to purchase carbon pollution abatement. The 2014-15 budget allocated $1.14 billion across the forward estimates for the ERF. The government insists up to $2.5 billion is available for purchasing abatement; however, it has been unclear how this money is appropriated, as it is not allocated in the budget papers.

As Senator Cameron outlined yesterday, this suite of bills sets Australia up to fail on our climate change obligations, to fail our children and grandchildren and to fail millions of people facing displacement from the effects of climate change. These repeal bills seek to set Australia up to do less to combat climate change. These bills seek to leave the burden, leave the heavy lifting of decarbonising our economy, to future generations.

There is a strong foundation of scientific fact underpinning the need to reduce global greenhouse gas emissions to reduce the risk of global warming above two degrees—so certain in fact, that doubt has crept in. With 95 per cent certainty that greenhouse gas emissions from humans are the cause of global warming, some cast doubt and say, 'What about the five per cent?' If you were 95 per cent certain that something bad or something nasty was going to happen to you or your family, would you sit by and say, 'What about the five per cent?' or would you find out what was causing the problem and go about fixing it? It is not too late to fix the problem of climate change, but time is running out fast.

Labor's approach to reducing emissions is to repeal the carbon tax and keep in place the already legislated emissions trading scheme, which puts a legal cap on carbon pollution. This lets business work out the cheapest and most effective way to operate within that cap. Cap and trade is overwhelmingly endorsed by economists as the most cost-effective and efficient emissions reduction method.

A number of international organisations, including the OECD, have confirmed that higher levels of emissions reduction can be achieved at much lower cost through a carbon market mechanism. Carbon pricing is cheaper and more efficient than direct subsidies without a pricing signal. The first two years of the carbon price has seen emissions from electricity fall, with coal powered generation down and renewable energy generation up. Meanwhile, national unemployment and inflation remain under control and solar and wind energy use has soared. The carbon laws have worked with the renewable energy target and economic changes to achieve these results. As such, the carbon price has been effective in increasing the competitiveness of renewable energy generation. Meanwhile, Australia's economy has grown and additional government assistance to households has more than offset any price rises caused by the carbon price.

Total emissions from electricity consumption in the national electricity market are down by over five million tonnes in the 12 months to May 2014. This means emissions from electricity generation have fallen by over 17 million tonnes, or over 10 per cent, since carbon pricing was introduced. The latest Australian greenhouse gas inventory shows that national emissions continue to drop. Emissions from all sectors, including land use and forestry, fell by over four million tonnes in the year to December 2013. The government's own assessments estimate the carbon laws will decrease national pollution by 40 million tonnes compared with business as usual. Current policies are also driving an uptake of renewable energy, with electricity from renewables rising by almost 40 per cent since June 2012 in the national electricity market. Brown coal consumption has fallen by nine per cent and black coal by almost 10 per cent.

Despite all of the ridiculous rhetoric from Prime Minister Abbott and the coalition government, the Australian economy remains strong. Annual growth is over three per cent and unemployment remains below six per cent. At present, jobs in the renewable energy sector continue to grow—jobs that are at risk if these bills are passed. Price impacts from the carbon pricing mechanism have been as expected or less and have had minimal impact on the Consumer Price Index. Latest figures show a 2.9 per cent rise in the year to March 2014—a rate that is within the Reserve Bank of Australia's target range. There was no tremendous spike in prices as incorrectly predicted by those opposite. Nine out of 10 households are being compensated for these price impacts, with a majority of households receiving more than enough to cover the price rises. In fact, the coalition government's own budget highlighted the small inflationary impact of carbon pricing. The budget stated that CPI would reduce by less than a percentage point in the next financial year, with underlining CPI barely changing. Keeping binding caps on pollution in our laws will ensure Australia meets its international emissions reduction targets under the second commitment period of the Kyoto protocol and under the United Nations Framework Convention on Climate Change—targets with which 99 countries, covering 80 per cent of global emissions and including all of the major emitters, have pledged to reduce or limit emissions by 2020.

What of China? China has committed to reducing its carbon emissions per unit of GDP by 40 to 45 per cent by 2020. China is moving to establish a national carbon market by 2020. China is also ramping up efforts to clean up its energy supply and improve energy efficiency. Over the past year, China launched seven regional carbon markets, invested over $50 billion in renewable energy and set limits on coal use. The seventh regional carbon market, in the south-west city of Chongqing, opened just two weeks ago. Chongqing has a population of almost 30 million people and the scheme covers over 250 companies, with carbon dioxide emissions exceeding 20,000 tonnes each per year. Unlike the other pilots in China, Chongqing's program covers six other greenhouse gases apart from carbon dioxide, including methane, nitrous oxide and manmade fluorinated gases. While we debate this ridiculous notion to rid our nation of an emissions trading scheme—which, with no action from this place, will come into effect on 1 July next year, or with support for Labor's amendment could come into effect sooner—China has seven regional emissions trading schemes and is moving to a nationwide scheme by 2020.

What of the United States of America? What action is our friend from across the Pacific taking to control emissions? The US has committed to reduce national emissions by 17 per cent below 2005 levels by 2020. This equals 21 per cent below their 2000 levels by 2020. If Australia were to keep pace with the US commitment of 17 per cent below 2005 levels by 2020, this would equal a 12 per cent reduction off our 2000 levels. President Obama has just announced new rules to reduce carbon pollution from American coal and gas power plants. The new rules add to existing federal regulations, state based carbon markets and renewable energy target schemes which are in place in 29 American states. It is clear that both the United States of America and China have clear plans to control pollution, invest in clean energy and to help negotiations on a global framework agreement in 2015.

Meanwhile, our Prime Minister is seeking to create an alliance with the Canadians to stop the global agreement. These bills and this alliance have left many across the world wondering: is the new Australian government serious about reducing emissions? After all, it was just a few years ago that the new Prime Minister famously dismissed climate change science as 'absolute crap to a small crowd in rural Victoria. In fact, based on the coalition government's policies, Australia's rating on the Climate Change Performance Index has dropped to 57th out of 61 countries. Embarrassingly, at last year's Warsaw Climate Change Conference, Australia received four of five 'Fossil of the Day' awards. These awards recognised the coalition government's backward proposal to wind back the carbon price mechanism and abandon support for research and clean energy. The coalition government has sought to frame this debate about the utility bills paid by households and businesses. In seeking to repeal the carbon price, the main purpose seems to be the miraculous reduction in utility bills and overall costs on households and business. Never mind that the rise in electricity has overwhelmingly been the fault of infrastructure upgrades to our distribution networks. Never mind that there are different prices and usages in every state.

The Prime Minister was unambiguous in stating the reductions Australians can expect if these repeal bills pass. He said:

Thanks to this bill, household electricity bills will be $200 lower next financial year without the carbon tax. Household gas bills will be $70 lower next financial year without the carbon tax.

There is evidence to suggest the coalition government have overestimated the impact of removing the carbon price on household expenses. The committee heard that households in some states could expect a greater than quoted reduction, while in others where rates or usage are not so high the reduction will be less. While Mr Graeme Wood, energy director at the Grattan Institute, told the committee that the savings that will be generated from removing the carbon price will be less than the increases when the carbon price was first imposed, other prices have risen over time and the carbon price has been internalised by business.

Unpicking it in exact terms is nigh on impossible. All of this would be fine in normal debate. People would understand that the Prime Minister is debating prices in average terms and would expect some reduction. However, given this Prime Minister's penchant for absolute honesty in this debate, if the repeal bills do one day pass this place, I will be eager to learn of any research into changes in electricity and gas costs, and hold him to account if his absolute guarantees are not met. If he is off, it will be another broken promise from this new coalition government—a record of broken promises that is getting longer and longer by the day.

The delays, the poor legislation and the RET review are clear impediments to long-term investment in the Australian renewable energy sector. The Investor Group on Climate Change suggests that it is easier and more secure to invest in countries such as Ireland, the UK and USA because of policy certainty than it is to invest in Australia now. Investors like long-term certainty with the lowest possible risk and reasonable returns. And it is not just big institutional investors that are being hit by the investment uncertainty created by the coalition government's delays and poor policy. The 2,000 investors in the Hepburn Wind cooperative in Victoria have had their projected returns slashed. The families who invested in the cooperative made their investment decision around 2008-09 and, of course, at that time there was bipartisan support for a carbon price mechanism. Their earnings are expected to reduce from 4.1c per share in 2012-13 to 1.1c per share without a carbon price. So much for the 'open for business' mantra declared by the new Prime Minister. The coalition government in fact are 'eyes wide shut' in their approach to providing certainty to business.

A flexible price would bring the Australian carbon price into line with the carbon price prevailing under the European Union emission trading system, which is currently expected to be around $6 per tonne of emissions. Moving to flexible price emissions trading would ensure Australia meets its international emissions reduction commitments, while we also reduce compliance and transaction costs for businesses and increase flexibility and improve risk management. Importantly, embedding a carbon price in our economy sets Australia up on a long-term trajectory for emissions reductions. Slow decreases in the cap on pollution over a long period of time gives business and households certainty and limits risk of a carbon shock in future years—a carbon shock that will hit households and business far harder than a responsibly introduced carbon price. Direct action subsidies with a finite duration do no such thing—and the coalition government is fully aware of this.

The necessity to act on climate change only grows stronger each year. The immediate and long-term costs of allowing warming greater than two degrees is the core reason for acting now with a policy suite designed to scale up over time. Removing this policy suite for the sake of a reduction in utilities costs in one financial year, which may not actually eventuate, is reckless and irresponsible. Despite the shallow rhetoric of the coalition government that they believe in climate change and support action, it is clear from these repeal bills that nothing could be further from the truth. If these repeal bills pass, we, the parliament, will leave Australia with no credible emissions reductions policy. We will leave future parliaments of Australia with much harder decisions.

I thank those young Australians from the AYCC who braved the Canberra cold yesterday to say, 'Your choice, our future.' Their message to this chamber is that senators must stand up for a future that these young Australians so desperately want; a future where their country, our country, is a global leader in clean energy; a future where Australia has a strong, robust emissions reduction mechanism, a legislated emissions reduction target, and is advancing a pathway to a global agreement. I urge senators to vote no to these bills.