Helen Kroger (Victoria, Liberal Party) Share this | Link to this | Hansard source

I will resume the remarks I was making earlier in the day. The Treasury model provided by the government is very limited, and in response the coalition, together with Independent Senator Nick Xenophon, commissioned independent economic research from the respected consultants Frontier Economics. What that modelling clearly demonstrated was that appropriate amendments to the mooted ETS could deliver an unconditional 10 per cent reduction in Australia’s year 2000 greenhouse gas emissions by 2020. This compares to the government’s own target of a five per cent unconditional target.

Importantly for households, the mums and dads, who are now beginning to understand that all of this is going to have an impact on them, the electricity generation sector could be dealt with in a less punitive manner. In short, household power bills need only rise by about five per cent in the short term rather than the staggering 25 per cent hike under the framework currently proposed. This equates to a possible increase of $44 per year compared to a price rise of $280 per year. The Frontier Economics report also provided insight into ways in which our key export industries could be protected in the global economy, minimising the damage of the imposition of the CPRS. There were significant and numerous recommendations from the report that have assisted the coalition in putting together amendments that we hope the government is seriously considering.

I would like to acknowledge the work that the Hon. Ian McFarlane is undertaking with Minister Wong in endeavouring to come back to this place and the other place with some significant amendments. Of these amendments, there are some key changes we are advocating that would dramatically reduce the harm that the CPRS would cause in its current form. It is critical that we provide a level playing field for Australian industries that are in emissions-intensive trade-exposed areas. There is no global upside in imposing costs on our industries if, in effect, that means that the activities of those industries and their emissions will merely go offshore.

Whilst agriculture was not immediately included in the scheme, it was to be considered for inclusion in 2015. That has been a cause of great concern to farmers. I find it interesting that the government have already leaked this week that they will exclude agricultural emissions from any CPRS framework. Whilst I am delighted for rural and regional Australia, it strikes me as passing strange that this would be leaked during what seems to be good-faith negotiations. Notwithstanding that, it is encouraging to note that farmers will be able to earn offset credits.

As a Victorian, I am particularly mindful of the consequences for the coal industry, particularly brown coal. The amendments seek to ensure that Australian coal producers are not unfairly penalised. The consequences for areas such as the Latrobe Valley could be catastrophic. We must endeavour to take a balanced and cautious approach. Australia has been blessed with reasonably priced energy resources, which has provided a foundation for the continuing strength and growth of the resource sector and the Australian economy. The importance of these sectors must be recognised and secured accordingly.

As a vocal advocate for small business I know firsthand what will happen with a dramatic rise in energy prices. Many small businesses operate modestly around the margins. Many are family operations that provide a livelihood for their families and dependants. In Victoria alone there are approximately 482,883 small businesses, representing 25 per cent of the national total, or 96 per cent of all businesses in Victoria. They must be protected. Coal fired electricity generators are a big part of this, and we must ensure that they remain financially viable.

Judith Troeth (Victoria, Liberal Party) Share this | Link to this | Hansard source

Order! I am sorry, Senator Kroger, but the conversation in the chamber is extremely audible. The speaker deserves to be heard in silence.

Helen Kroger (Victoria, Liberal Party) Share this | Link to this | Hansard source

Thank you, Madam Acting Deputy President. It is good to see a woman in charge! Climate change is a complex issue, with diverging views expressed not only by those in this place but also by the experts. It is important in a democracy that we respect people’s rights to hold divergent views, and that holds for this place as well. I hope that the negotiations continue to be given a priority by this government so that we have an opportunity to provide some needed surety to industry, businesses and families.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Madam Acting Deputy President, I ask you just for a moment to suspend any semblance of critical thought and accept without question the cataclysmic, alarmist version of anthropogenic global warming advanced by the likes of the Minister for Climate Change and Water, Senator Wong, Tim Flannery and Al Gore, and as you lie awake at night, worried by the mere thought of oceanfront land in Wagga Wagga, you realise that something needs to be done before it is too late. The alarmists have insisted that Australia needs to act now and introduce an emissions trading scheme because climate change is the ‘greatest moral issue of our time’ and, as an acquiescent disciple of this new religion, to save the planet you concoct a scheme that will tax every business and every family in the country. Sure, it will raise the cost of food, electricity, construction and transport, but that is the price you are prepared for others to pay. You condemn any opponents of your plan as sceptics and heretics while trying to convince the community that it will not hurt them too much. In fact, so desperate are you to facilitate the introduction of your multibillion dollar wealth redistribution system that you promise to compensate some of those affected by more than it is actually going to cost them. Surely everyone can see the sense in taking from the wealthy and giving to those who pollute just as much but are not as well off. Just think of it as spreading the great socialist love to save the planet.

Despite the rejection of your scheme by farmers and environmentalists, businesses and families, you plough on regardless. What does it matter that hundreds of thousands of jobs are going to be lost and industries closed if it means that we have less carbon dioxide in the world? Desperately looking for support, you enlist those notorious polluters in the investment banking, legal and financial markets to support your cause, conveniently forgetting that only months ago you were blaming their excessive culture of greed for the failure of the world financial system. Ignore, too, the billions of dollars they stand to make from the creation and administration of an unwieldy bureaucracy and the carbon trading scheme you propose. Surely the opportunity to profit would not be the reason that they endorse the scheme, would it?

Such is the urgency of the matter at hand that you insist the parliament pass your legislation immediately, even though your new scheme will not actually commence for a couple of years. Worse still, you admit to yourself and the public that your scheme will not make any difference to the climate unless the rest of the world does something similar. Of course, the rest of the world will not be making up their minds for a while yet, as they have ditched any prospect of reaching a global agreement. But, undeterred, you make the decisive and tough decision to act now, even though you know you are damaging the economic future of your own country.

Let us get back to reality. Actually, that was reality. Under any critical analysis, the above scenario would be considered the height of political madness, yet that is exactly what the advocates of Labor’s dishonestly named Carbon Pollution Reduction Scheme want to do, and they want to do it without being honest with the Australian people about their inefficient and ineffective scheme. Madam Acting Deputy President, if you walk down the street and ask the average Australian about an ETS or a CPRS, the chances are that they will not know anything about it and they will not be able to explain it to you. In seeking to explain this flawed scheme, I would like to use a few lyrics from a song—not the same song that our esteemed Prime Minister used but another one. It is called Every Breath You Take by The Police:

Every breath you take

Every move you make

Every bond you break

Every step you take

I’ll be watching you

They are some of the words of that song and they neatly encapsulate what these Carbon Pollution Reduction Scheme bills will do. They impact on everything that you do, everything you consume, everything you use and everything you build. These bills and this government regard every breath you take as pollution. That is right: every time you breathe out, the government considers that you are polluting the environment and adding to global warming.

Some quick back-of-the-envelope calculations suggest that all of us contribute about 500 kilograms of this newly declared evil gas every year simply by breathing. So, if you want to reduce carbon dioxide emissions, surely the answer is to simply breathe less. There is a solution with a catchphrase: we can all go green by turning blue. Perhaps we could start with some of those celebrity climate change alarmists. If they preached less and stopped trying to scare the children out of their innocence, perhaps our carbon dioxide emissions would drop significantly. It would certainly be a good start. We could encourage all Australians to take one breath less every minute and the entire carbon dioxide global warming alarmism would disappear in a puff of colourless, odourless, non-toxic exhaled gas that the alarmists dishonestly call a pollutant.

Then we could make this government’s dishonest tax on hot air, the CPRS, disappear too. Indeed, I state that that is my ultimate intention—to defeat this imprudent overreaction to natural climate change by a government which is more keen on control than on actual results. Control is what these bills are about, because these bills also engage Orwell’s feared Big Brother in the form of what the bills describe as the ‘Authority’. The authority themselves or their appointed agents can walk into any business and make demands of it and, in doing so, overturn some important legal precedents which are dismissed under this legislation . There is no right to remain silent under this bill, there is no protection from self-incrimination and there is no presumption of innocence, because the burden of proof resides with the accused rather than the accuser. That is right: the authority can make accusations without evidence and somehow you have to prove that you are innocent rather than their having to prove that you are guilty. These bills also put the government at the very heart of every aspect of our economy. Every development, every construction, every industry will have to make the trip to Canberra begging for indulgence and permission from the all-powerful minister and her minions controlling the authority squad. It is a return to the bad old days of patronage, largesse and the rorts and rackets that can be best described as Labor mates gaining access once again.

As I mentioned before, most Australians really do not understand this new tax on their breath and their life. But those who do understand the emissions trading scheme and will be bearing the cost of it—rather than profiting from it—do not want anything to do with it. I am talking about the mums and dads, the small business operators and the regular people that this government have forgotten in their pandering to special interest groups and leftist elites. In fact, the whole global warming phenomenon has faded in public consciousness since Al Gore’s mockumentary was exposed as being full of false fears. It seems the public is slowly waking up. A Lowy Institute poll from October found that climate change now ranks seventh out of ten policy priorities for the Australian public. In 2007 it was the top priority. There are clearly many more important issues for the government to be focusing on and spending their money on instead of on this ill-conceived CPRS.

Speaking of money, after years of claiming that the science is settled, the anthropogenic global-warming rent seekers continue to demand taxpayer handouts for further research. One could say they are caught in a catch 22 of deceit. They need to tell more falsehoods to get more money to generate even more nonsense—and nonsense it is. The research on which much of this alarmism is built has been exposed as a fraud. The IPCC hockey stick graph was a fraud. The tree ring data was a fraud. I could go on and on and on. One could describe it as the Sara Lee cheesecake effect, ‘layer upon layer upon layer’ of alarmism and deceit, giving rise to the new religion of climate change. You may think I am being unfair, but that is not me calling it a religion; it is Justice Michael Burton of the UK, who has held that belief in climate change is a religion and not a valid scientific belief.

What is amazing about this commitment to the CPRS and the new religion of climate change is that Australia acting alone will actually make no difference to the climate. Australia is responsible for only 1.4 per cent of the world’s man-made carbon dioxide emissions. In comparison, every few months China increases its carbon dioxide emissions by more than Australia’s total annual emissions. So an Australian CPRS, especially one enacted in isolation, will not make one bit of difference to climate change. Given that there is going to be no legally binding agreement—and only a ‘political commitment’ reached—in Copenhagen, it is even more important that Australia not go it alone by passing this legislation. Just today, the Canadian environment minister said that they will not be enacting any emissions trading scheme in their country in the absence of an international agreement. Hooray for Canada protecting their national interest! It is about time the Australia government did the same.

For months the meeting at Copenhagen was heralded as the defining moment, when an international agreement would be reached. In fact, the UK’s alarmist Labour Prime Minister Gordon Brown said that, if an agreement were not reached in Copenhagen, it would be too late. But somehow things have changed and that defining moment and that ‘too late’ claim have been pushed back and suddenly disappeared. Who knows when or if an international agreement will ever be reached? If it takes a form similar to the failed Copenhagen treaty, we are right to be very, very concerned. I started a petition about this on my website, and in just a few days I had 4,818 Australians registering their dismay at the Copenhagen treaty and our commitment to signing up to it.

Amazingly, Kevin Rudd, the enforcer and sergeant-at-arms of the Copenhagen conference, confessed he had not even read the Copenhagen treaty; yet he was prepared to sign up to assigning some of Australia’s sovereignty and billions of taxpayer dollars to the United Nations—an unelected and unaccountable body. What sort of leader commits to something that he cannot even be bothered to read and consider? It is the same leader who brings this pointless and hopeless CPRS into this parliament. By committing ourselves to this flawed policy now, Australia is condemning itself to the certainty of higher prices, job losses, damaged industry and a decaying economy, while indulging the gargantuan ego of an increasingly erratic and volatile Prime Minister.

The result will be there for all of us to see. It is going to come to higher prices for everything we buy. A carbon pollution reduction scheme requires businesses to pay for carbon emissions. That means their costs have increased. Gee, how are they going to pay these costs? Well, businesses will be forced to increase their prices. Who pays for these increased prices? Australian consumers. Everything we purchase and use will be affected. The estimated grocery price increase is up to seven per cent. Australian families are already struggling under increasing bills. Electricity companies and consumers will be hit hard by the price rise in electricity. The government have even asked Morgan Stanley to examine the effect of an ETS on electricity. But they will not release the document, despite requests from the opposition, because they know what it discloses. If the report were favourable, mark my words, it would have been released straightaway. But it has not been. Fortunately, thanks to some prudent press, we are reading that, within weeks of the CPRS being enacted, we should expect some Latrobe Valley power generators to be placed in administration. If the government are prepared to say that will not happen, let them off with the guarantee.

We are going to lose tens of thousands of jobs in this country, because other countries will not be enacting the CPRS or an equivalent scheme. We will see industry disappear offshore, because, if Australia goes it alone, it is bad and not in Australia’s economic interests. We had a report commissioned by the Minerals Council, which found that the CPRS would cost 23,000 mining jobs by 2020—the very jobs and industry sector that this government is pinning its hopes on to get it out of the mire of debt it has already created. In my state of South Australia, a CPRS would devastate small towns like Whyalla and Port Pirie. You might expect the largest industry in Port Pirie, for example, to have to close down, resulting in 3,000 job losses—30 per cent of the Port Pirie workforce—thanks to a CPRS.

This legislation is bad for families. As I mentioned earlier, the prospects of higher prices and unemployment will have a devastating effect on Australian families—and no-one will be immune to it. It will be there taking your money every time you iron, every time you cook and every time you seek to cool your home. But to the people of Australia I say: it is not all bad news, because some people will actually profit at your expense. Some people will be making money out of this, and Penny and Kevin think you should be happy for them.

Judith Troeth (Victoria, Liberal Party) Share this | Link to this | Hansard source

Order! Senator Bernardi, you should refer to the Prime Minister by his correct title.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Senator Wong and the Prime Minister think you should be happy for them, because the CPRS has a very real prospect of making a lot of money for the lawyers, the consultants and the merchant bankers. They are going to have to advise the businesses, the companies, the executives et cetera, and interpret the confusing and complex laws surrounding this scheme. If a majority of Australians have no idea what a CPRS is, or does, or how it works, or how it is going to affect the climate, then they are certainly going to need a bevy of lawyers to explain it to them. Investment bankers will make billions upon billions of dollars, at taxpayers’ expense, by manipulating the market for carbon permits. Do not take my word for it. The billionaire, leftist, green advocate, George Soros, said at a London School of Economics seminar:

The system can be gamed; that’s why financial types like me like it—because there are financial opportunities.

This CPRS runs against every principle that I hold dear and that inspired me to get involved in politics: support for smaller government, lower taxes, support for families, encouragement of free enterprise, an orderly society and reward for effort. These are the very principles upon which my party was built and to which I fully subscribe. The Rudd government’s CPRS violates all of these principles, and no-one who is strongly committed to these key values can seriously consider supporting this Labor government scheme. I am amazed that anyone can seriously support this scheme. The CPRS will change the way our country operates. It will affect every single one of us—and for what? For no environmental benefit whatsoever. That is the crux of all of this. Why would we put ourselves through this pain when it will not make any meaningful difference to the climate? A CPRS simply offers no meaningful benefits but will impose very real, huge costs.

Of course, we all want to work towards conserving our natural resources and our natural environment. We want to have a sustainable way of life and a sustainable approach to our land, and there are many ways in which we can successfully do that. But the CPRS simply is not one of them. Let me reiterate: the CPRS will impose higher costs on everyone for everything. It will cost Australian jobs and damage Australian industry and the economy, and it will not achieve its aim of reducing carbon emissions. It will not make a jot of difference to the climate. So why are we doing it? This is not in the best interests of Australians or Australia. I will not compromise on my commitment to the core Liberal Party philosophies to which I subscribe. I will stand against big government, I will continue to advocate for lower taxation, I will fight for the interests of families and I will foster free enterprise. Accordingly, I will vote against this despicable Carbon Pollution Reduction Scheme.

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

If the government persists with this flawed ETS legislation next week—the Carbon Pollution Reduction Scheme Bill 2009 and related bills—it will provide the Australian people with an occasion to see a fundamental difference between this side of politics and the Australian Labor Party. The vote we will see next week on the government’s proposed emissions trading scheme will underline the key differences between the coalition and Labor in a way that few votes do. On one side we have the coalition: standing up for jobs in a challenging economic climate and placing practical environmental action and measured policy responses above political symbolism. On the other side we have the Labor Party: prepared to sacrifice jobs in an act of political expediency, ignoring sensible suggestions and rushing through an economy-damaging bill in an expression of legislative vanity.

Before I comment specifically on the government’s legislation, I would like to make some observations about the way this debate has been conducted. The debate on climate change, climate science, conclusions drawn and proposed policy responses represent one of the more extraordinary chapters I have witnessed in recent political history. The Australian manifestation of this debate has been marked by politics even more than most of the policy debates in this place. The failure of the previous government to sign Kyoto was, as we recall, used to good political effect by Labor—not to achieve an environmental outcome, because Australia was already achieving its targets, but as a symbol to portray the previous government as tired. The Labor Party is now seeking to use its own ETS as the new marker of environmental virtue. The purpose of Labor’s ETS is political. The purpose is to be seen to be doing something; the policy merits are secondary. Thus the legislating of an ETS by Labor has become an end in itself.

It would not have escaped many that some climate campaigners have introduced an almost theological tone to this debate. Some have sought to couch the issues in moral terms. Those who disagree are labelled ‘deniers’. Those who agree are called ‘believers’. ‘Sceptic’ and ‘scepticism’ have become terms of derision. To even defend the right to scepticism can see one branded as a sceptic. Scepticism was once seen as a scientific virtue at the very heart of scientific inquiry and robust policy debate. Someone I never thought I would quote in this chamber, expatriate Australian broadcaster, author and raconteur, Clive James, pointed out last month in a BBC essay entitled ‘In defence of scepticism’ that healthy questioning has not always had a bad name. Clive James said:

Sceptics, say the believers, don’t care about the future of the human race. But being sceptical has always been one of the best ways of caring about the future of the human race. For example, it was from scepticism that modern medicine emerged, questioning the common belief that diseases were caused by magic, or could be cured by it.

Sadly, some have sought to demonise those who pose legitimate questions and to caricature their views in the most tasteless and erroneous ways. In his essay, Clive James also says:

It’s a nasty word to be called, denialist, because it calls up the spectacle of a fanatic denying the Holocaust. In my homeland, Australia, there are some prominent intellectuals who are quite ready to say that any sceptic about man-made global warming is doing even worse than denying the Holocaust because this time the whole of the human race stands to be obliterated.

Enter stage left and right on cue, on Monday of this week, the Greens candidate for Higgins, Dr Clive Hamilton. In an article on crikey.com.au, he likened those who hold doubts about climate science to Holocaust deniers. Dr Hamilton deliberately and methodically assessed the relative moral standing of Holocaust deniers and what he calls ‘climate deniers’. This is the disgusting notion that Dr Hamilton advances:

… climate deniers deserve greater moral censure than Holocaust deniers because their activities are more dangerous.

Dr Hamilton actually argues that climate sceptics are more dangerous and more morally repugnant than Holocaust deniers. This is as wrongheaded as it is disgusting. It is belittling of Holocaust victims, survivors and their families. It is offensive and Dr Hamilton should apologise. Dr Hamilton is indeed an extreme example of the intellectual bullying of, and hysterical personal attacks on, those who have legitimate questions about climate science and policy.

I make these observations not to declare a definitive view on climate science but merely to highlight the unhealthy political discourse that has developed in relation to these issues. Good ideas and good policy have nothing to fear from open debate.

What do we know about the government’s proposed scheme? We know it will increase prices. The government has admitted as much. We know it is equivalent to a substantial increase in taxes—some estimates are that it is the equivalent of a 2.5 per cent increase in the GST. We know that, even despite the massive tax increase, this will not be a revenue neutral exercise. We know it will cost jobs and we know that, on its own, it will do nothing to reduce global temperatures.

The coalition, as the chamber knows, is currently engaged in negotiations with the government and we will have to wait and see what results come from those, but the coalition has been active. We have offered the government constructive suggestions. The coalition has even gone so far as to commission economic modelling to demonstrate its case—and full credit to Senator Xenophon for his contribution to the exercise. What that research showed is what the coalition has feared all along, that the government’s ETS is flawed, will hurt the Australian economy and sacrifice Australian jobs. At the same time, the Frontier Economics research shows that the government’s flawed ETS does not even offer the best carbon abatement.

Clearly the government is rushing this legislation according to its political timetable. There has always been wisdom in waiting until after the Copenhagen summit before considering this legislation. That has always been the view of the opposition. That approach would give Australia the time to consider what the rest of the world is intending to do, as is appropriate for a small nation.

This became even clearer after the APEC leaders summit last week. World leaders decided that pushing for a treaty with binding targets was too hard an ask for the Copenhagen summit. Instead, representatives at Copenhagen will now be asked to sign an eight- or nine-page memorandum to signify their commitment to action. It will be nothing more than a glorified press release. The government’s whole rationale for passing the ETS legislation before Copenhagen has been shot, so the argument now is that we desperately need the ETS legislated in Australia to encourage world leaders to sign a press release.

There is no prize for being the nation which proposes the most aggressive and taxing scheme. Imposing harsher restrictions on Australian businesses, harsher than the rest of the world, will only harm Australian jobs and do little to reduce global emissions. Australian ETS legislation does not need to be passed before the summit and Australia should not be locked into a scheme which may well be out of step with the rest of the world.

Australia should also wait to see the actions of the United States. The Waxman-Markey bill, currently working its way through the US congress, shows every sign of being more supportive of US industries than the Rudd government’s legislation is of Australian industries. Other major emitters, such as China and India, may well be unwilling to take any substantive action.

Worse still, the government are confused in their objectives. Their stated objective is to pass an ETS. Their stated objective is to take steps to reduce carbon emissions in the most efficient way. This legislation will not do that. As I have said already, the ETS should not be seen as an end in itself. It is simply a tool to achieve an outcome. If we decide that a particular mechanism or model is not the most efficient tool to achieve an outcome, then we would be unwise to pursue it.

Deferring the scheme would give the government a chance to look afresh and, let us face it, having no scheme would be better than the government’s current proposal. After all, the government have already admitted that their scheme will cost jobs. They happily followed the coalition’s advice to delay its implementation by a year. In doing so, they noted the current financial situation—a tacit admission that introducing a complex new regulatory burden on Australian businesses during an economic downturn would destroy jobs.

Frontier Economic points out that 68,000 Australians will not be employed in rural and regional Australia if the government persists with its design. This new tax on Australian industry amounts to more than $12 billion per year, according to the government’s own predictions. Let us think about the efficiency of a scheme that collects more than $12 billion a year only to return it to different sectors in the economy, resulting in enormous inefficiencies and massive churn of taxpayers’ money. A huge administration will be needed to oversee this process. Permits sold and revenue collected will be distributed to favoured industries. We have already seen an unprecedented lobbying campaign from industry to gain free permits and compensation. I pity those industries not able to afford a lobbyist or bereft of the political contacts of savvier industries.

The federal government will be picking winners on an unprecedented scale. Access to the scheme, a decision made by a politician in Canberra, could result in substantial economic benefits. Failure to secure free permits or subsidies could mean financial ruin. Do we really need a minister in the federal government with such sway over the success or failure of businesses? This feature of the ETS could usher in an unprecedented era of government intervention in the economy. Decisions by government ministers will have immense and far-reaching consequences for business. The ability to lobby governments could become more important than designing, marketing and distributing goods and services. Arbitrary decisions made to bestow assistance or free permits on favoured businesses or industries will interfere with the allocation of resources in the economy. We know from past, painful experience that governments have a terrible track record when it comes to picking winners. Why grant a minister in the government this unprecedented arbitrary power to determine success or failure?

A case in point is the power industry in my state of Victoria. As Robert Gottliebsen said in the Business Spectator recently:

The current legislation would have an $8 billion adverse impact on four Latrobe Valley power generators which is offset by $2 billion in current credits—a net enterprise value reduction of $6 billion. Within a week of the current proposed legislation being passed, the boards of each of the companies that own the Latrobe generators will meet with their auditors on whether the companies’ debt covenants have been broken. Almost certainly a majority, if not all of the boards, will decide to appoint official administrators.

That is terrifying. The government’s own Morgan Stanley report, which could shed more light on such outcomes, remains suppressed. The government claim that the business community needs certainty and that the coalition’s reluctance to support their bill is depriving business of that certainty. But as one business chief put it, ‘The business community does not want the certainty of a bullet.’ It is certain this scheme will cost jobs. What remains uncertain is the action of the rest of the world. It is unclear how willing large emitters like India and China will be to cut emissions. If it emerges they are not, our ETS will at best have no impact on global climate or at worst actually increase CO2 emissions.

Energy-intensive Australian businesses that typically emit far less CO2 during production than their overseas competitors will be burdened with a new tax that their international competitors will not face. This could force them to close or shift production offshore to countries with zero or fewer restrictions on emissions. This would result in higher emissions and fewer Australian jobs. Before the government lump blame onto the coalition for creating uncertainty, they would do well to look in their own backyard. According to Professor Warwick McKibbin, the long-term carbon price is uncertain because of the design of the government’s scheme. In Europe we have seen a chronically unstable carbon price, which has robbed business of certainty and frightened investment away. Imagine the consequences of that uncertainty on an economy as resource intensive as Australia’s. It would be crazy to invest in a new mine or a new power plant under the government’s current scheme. Investments in countries with similar resource endowments but without complex emissions trading schemes suddenly look far more attractive.

The government risks overseeing a substantial flight of capital and jobs out of Australia and into countries with far less demanding environmental policies. This could decimate jobs in rural and regional Australia and seriously threaten Australia’s recovery from the effects of the downturn. It is naive in the extreme to think that severe action on the part of Australia will result in other nations stampeding to follow our lead. It is self indulgent, even for Mr Rudd, to subjugate Australia’s best interests to satisfy his vanity. We are one of only five nations on track to meet their Kyoto targets. The vast majority of Kyoto signatories are nowhere near their commitments to cut emissions. Prior to the announcement from APEC leaders, it was just a risk that the Copenhagen meeting would result in no real emissions targets, but now it is a certainty. On Mr Rudd’s timetable, we may well look very foolish indeed.

Let us be clear: this ETS would represent a massive change to the Australian economy. We need to think the consequences through very carefully. For instance, an ETS creates new property out of nothing. It creates permits—a form of financial alchemy. Once created, this property in a legal sense will have value. Should the world reach the conclusion down the track that emissions are under control and an ETS is no longer required, there would be no way governments would ever be able to abolish this scheme. No government could afford to buy out the permit holders.

Make no mistake: once an ETS is in place, it can never ever be repealed or abolished. I pose the question: why would we introduce a scheme that can never be abandoned at a time when we have next to no idea about what the rest of the world is going to do? The government need to slow down, sit down and reassess. We know this scheme will cost jobs. We know that action from Australia is useless unless it is part of a coordinated global strategy. Yet, the government persist. Now that Copenhagen no longer looms as an artificial deadline, the government need to stop. They need to rethink. We have the time. The government should reassess their approach. The legislation should be opposed.

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

Climate change is a global problem caused by carbon pollution. The Carbon Pollution Reduction Scheme will build a low-pollution economy for the future of Australia. Under the scheme, Australia’s biggest polluters will pay for the pollution they generate and there will be a limit placed on the number of Australian carbon pollution permits issued each year. The sale of permits will raise $11.5 billion for the Australian government in 2010-11, and every cent will be used to help households and businesses adjust to the scheme. The scheme will result in changes to a wide range of prices, but the overall increase in the cost of living will be modest.

The Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills give effect to Australia’s obligations under the United Nations Framework Convention on Climate Change and the Kyoto protocol. For too long we have poured greenhouse pollution into the atmosphere and we are continuing to do so at an alarming rate. The science tells us that this pollution is causing climate change. We are already starting to feel the effects of this pollution, and projections show that if we do not act it will only get worse, with changing temperatures and rainfall patterns, more droughts, floods and water shortages, rising sea levels and extreme weather. Australia, already the driest inhabited continent on earth, is particularly vulnerable to climate change. The longer we wait to act on climate change, the more it will cost and the worse the effects will be.

Around 340,000 people live in the ACT, and this of course is the home of Canberra, the nation’s capital. It is located in the south-east region of New South Wales and is part of the Murray-Darling Basin. I would like to work through the following examples of the potential impacts and costs to the ACT’s industries, infrastructure, environment and people. The ACT is likely to experience rising temperatures and increases in extreme weather events like high-intensity rainfall, flood, drought and bushfire risk. There is a likelihood of more weather related natural disasters. By 2070 the annual average number of days over 35 degrees Celsius in the ACT could grow from the current five to up to 25 days.

Water supply in the ACT is threatened by reduced rainfall and run-off, increased evaporation and the increased occurrence of drought associated with climate change. Inflows into catchment areas decreased by 63 per cent during the 2001 to 2008 period. By 2030, a five per cent increase in water demand is projected, but with a 20 per cent decrease in run-off into ACT dams. Increasing water storage capacity will necessitate increases in the price of water for domestic and industrial uses. The ACT’s electricity and water provider, ACTEW, is enlarging the local Cotter Dam to provide an additional 78 gigalitres of water, at significant cost. The enlarged Cotter Dam and increased water extraction from the Murrumbidgee River will provide better water security under the reduced rainfall conditions predicted as a result of climate change.

Increased temperatures and increased evaporation due to climate change will also increase the risk of bushfires. By 2020, the number of days with very high or extreme fire danger could increase from 23 days to between 26 and 29 days, but by 2050 may increase by up to 50 per cent. The Canberra bushfires of 2003 make this a very real and serious projection for the people of Canberra, and I think that the recent Victorian bushfires serve as a reminder to us all of the human tragedy associated with such events.

Drought is likely to become more frequent and persistent as a result of climate change and it has the potential to disrupt electricity generation capacity and affect the reliability of electricity suppliers. An increase in average and peak temperatures, particularly in the summer months, will increase energy demand as people switch on fans and coolers and commercial buildings rev up their air-conditioning services.

As the number of very hot days—as I mentioned earlier, above 35 degrees Celsius—increases, it could more than double the number of illnesses and heat related deaths in the ACT, with the elderly particularly vulnerable. Currently, 14 people aged 65 and over die annually in the ACT from heat related deaths. This could jump to between 37 and 41 per year, using that average temperature increase as a guide, and to between 62 and 92 by 2050. Warmer conditions may also spread vector borne, waterborne and food borne disease further south, and these health issues could increase pressure on medical and hospital services.

Debate interrupted.