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Delivering a low carbon future: what is the role of the states given the Federal Government's carbon tax? Address at the opening of the 2013 Conference of the National Environmental Law Association, Melbourne
THE HON MARK DREYFUS QC MP Attorney-General Minister for Emergency Management
Delivering a Low Carbon Future
What is the role of the states given the Federal Government’s carbon tax? OPENING OF THE 2013 CONFERENCE OF THE NATIONAL ENVIRONMENTAL LAW ASSOCIATION MELBOURNE
7 MARCH 2013
Thank you for the invitation to open the national conference of the National Environmental Law Association.
I would also like to respectfully acknowledge the traditional owners and custodians of the land on which we meet today, and to pay my respects to their elders, past and present.
As environmental lawyers, many of you will have growing practices in climate law. Of course, when I first started practicing law in 1982, some 30 years ago, there was no such thing as climate law, and environmental law itself was in its infancy.
The fact that there is now a rapidly growing body of law in this area, reflects the critical changes that are now underway in our economy, as we begin the long path of de-linking our economic growth and nation prosperity from carbon emissions.
The topic for this conference “Delivering a Low Carbon Future” and its subtopic “What is the role of the states given the Federal Government’s carbon price” raise matters of critical importance to our nation.
On Monday many of you will have seen that the Climate Commission released its latest report, titled The Angry Summer. Professor Flannery and the other members of the Commission were clear in that report the extreme weather events that have been wreaking havoc across our nation in recent months are linked to climate change. To quote briefly from the Commission’s report:
“The Australian summer over 2012 and 2013 has been defined by extreme weather events across much of the continent, including record-breaking heat, severe bushfires, extreme rainfall and damaging flooding. Extreme heatwaves and catastrophic bushfire conditions during the Angry Summer were made worse by climate change…
It is highly likely that extreme hot weather will become even more frequent and
severe in Australia and around the globe, over the coming decades. The decisions we make this decade will largely determine the severity of climate change and its influence on extreme events for our grandchildren.”
The extreme weather events that we’ve been experiencing as our climate warms are causing enormous hardship to people throughout this country. And some Australians have lost their lives, particularly to the ravages of bushfires.
Of course Australia has always had bushfires, but the fires that we’ve experienced in recent years have been of such ferocity that many of the principles and techniques for bushfire fighting, developed by our emergency services over generations of hard-won experience, are now failing us.
And in addition to the catastrophic human cost of the climate-linked disasters we’ve been experiencing, the economic costs to our society from climate change is mounting. The costs of repeated floods in the north of Australia and catastrophic fires in the south are growing, and the extended droughts that have impacted Australian farmlands over the last decade have inflicted a terrible burden on our farmers and farming communities.
On Tuesday The Australian newspaper ran a front page story on the exodus of despairing West Australian farmers from the once prosperous, but now drought ravaged wheat belt east of Perth. And although that newspaper has long been a flagship of climate change denial, it did at least quote a despairing farmer from the region who believed that the climate was changing.
I could say a great deal more to you about the imperative to move Australia to a low carbon economy, but I’m fairly confident that I’d only be preaching to the converted.
So now I’ll briefly address the two key questions posed by this conference title: First, what has been done by the Federal Government to move Australia to a low carbon future, and secondly, I’ll make some comments on the role of the states given the Federal Government’s carbon price. In conclusion, I’ll be making some comments about the nature of the political conflict that we’re now engaged in. The Clean Energy legislative package, which was passed by this Parliament in November 2011, built upon more than a decade of policy debate and economic discussion on how Australia would reduce its greenhouse gas emissions.
The central element of the Australian Government’s Clean Energy Future plan was the establishment of the national legal framework for the carbon pricing mechanism, which came into operation on 1 July 2012.
The carbon price has now been in operation for around nine months and the ongoing strength of our economy - according to every leading economic indicator - serves to show that the impact pricing carbon pollution on jobs and investments has been negligible.
The carbon price is operating as the Government planned for and expected it would, and is already starting to influence the behaviour of Australia’s greenhouse gas emitters to reduce their emissions.
Australian companies are already taking advantage of the opportunities provided by Australia’s price on carbon. Businesses of all kinds are making changes in response to the lived experience of carbon pricing, and discovering new ways to think about waste and energy.
Australian households are also changing their behaviour with around 700,000 Australian households, or 1 in 12, now buying GreenPower - voluntarily contributing to the renewable energy sector.
As most of you will be well aware, in August last year - well in advance of expectations - the Government secured an agreement to link Australia's ETS with the European Union Emissions
Trading System. It is a strong international endorsement of the design and integrity of our scheme by the largest and most mature emissions trading scheme in operation.
This means that from 1 July 2015 Australia's carbon price will reflect the carbon price of 30 European countries, which cover around 530 million people.
Having led the Australian Delegation to the United Nations Climate Change conference in Doha in mid-December last year, there was tangible further progress made on shaping a new global agreement to tackle the challenge of climate change, and Australia is playing an important part in that.
Over the coming year, a number of other elements of Labor’s Clean Energy Future package will come into effect.
The Clean Energy Regulator is now working with liable entities to prepare for the first surrender process in June 2013—the point at which these firms will account for the first portion of their emissions liability for 2012-13.
The Clean Energy Finance Corporation will commence operations in mid-2013, funded with revenue from the carbon price.
The first auctions of carbon units are scheduled for early 2014.
The Department of Climate Change and Energy Efficiency has already engaged with stakeholders on the design of the auction scheme, and further consultation will take place on the draft auction regulations in early 2013.
The flexible price period and the one-way link to the European Union Emissions Trading Scheme will commence on 1 July 2015.
The Climate Change Authority will advise on pollution caps by February 2014 and the Government will announce the caps in the Budget soon after.
So that’s a brief, potted summary of how the Federal Government is moving Australia to a low carbon future.
While a generational reform to the economy of this kind will inevitably require tweaking, as changes are made to the way in which its various mechanisms are applied in practice, there is no doubt that the pricing of carbon pollution must form the keystone of any economically responsible and effective response to the threat of climate change.
Now I want to say a few words about the subtopic of this conference - “What is the role of the states given the Federal Government’s carbon price?”
While the carbon price is the keystone of the Federal Government’s policy response to climate change, there are many more things that can be done to complement this policy. As I’ve noted, the Federal Government is doing some of those things.
For example, the Renewable Energy Target is one critical facet of our intervention to correct the market failures that have made climate change a real and present danger to our country.
The establishment of the Clean Energy Finance Corporation to support jobs and economic growth through innovative clean energy solutions, funded with revenue from the carbon price, is another reform that is properly the role of the Federal Government.
So what contribution can the states make?
At the broadest level, state and territory governments have a clear choice: to support through complementary laws and actions, or to oppose through contradictory policies, the measures that have been put in place by the Federal Government to move our nation toward a low-carbon, 21st century economy.
Sadly, but not unexpectedly, the newly elected conservative governments in Queensland, Western Australia, New South Wales, the Northern Territory and right here in Victoria, are actively working against the reforms that we’ve put in place at the national level.
The axing of many state based climate change and sustainability initiatives by incoming conservative governments, and the sacking of state public servants involved in those programs, is something that has been well covered by the Australian media.
Queensland public servants in particular have borne the brunt of Campbell Newman’s opposition to action on climate change, even as that state’s greatest natural asset, and a treasure to all Australians, the Great Barrier Reef, is dying as sea temperatures rise and the impacts of mining developments in sensitive areas adjacent to the reef escalate.
And here in Victoria the Baillieu Government has been working against the reforms that we’ve been implementing at the national level. According to Tristan Edis, writing in Climate Spectator this week:
“The Victorian government has closed the energy programs operated by Sustainability Victoria and would be lucky to have more than a handful of people with expertise in renewable energy. It also recently announced it would be abolishing the Energy and Resource Efficiency Plans program that requires large energy users to implement short payback energy efficiency measures.”
And I’d add to that sad record that while the Federal Government has been creating incentives for the establishment of wind farms and other forms of clean energy generation through measures such as the Renewable Energy Target and the carbon price, the Baillieu Government appears committed to using planning laws to block this kind of economic development in Victoria. Changes to Victorian planning laws overseen by Planning Minister Matthew Guy have made it extremely difficult for wind farm operators to set up in Victoria, costing this state jobs, economic growth, and the future its children deserve.
The move toward a low carbon future is a generational economic reform. It embodies a substantial and long-term process of transition. Australia is a federation, and while the Commonwealth has the power to make major changes the Australian economy, I believe that the states should be actively involved in this economic transition as well.
I believe that the states should be actively supporting the measures being put in place at a federal level, and not only that, should be taking the initiative themselves to develop polices to complement federal initiatives.
Just in case anyone missed it, this is an election year.
Delivering a low carbon future for this country is something is something that I’ve been fighting for throughout my political career. When Labor was elected in 2007 we ended the period of climate change denial and policy inaction that had gone on for 12 long years under the Liberal Government of John Howard.
Yet despite all that’s been happening in politics and science since the Howard Government belatedly embraced the pricing of carbon as a necessary economic reform, the Federal Opposition under Tony
Abbott and his coterie has slid backward into denial about the need for effective action on climate change.
It saddens and astonishes me that after the unequivocal and appallingly visceral recent experience of the damage climate change is already doing to our nation; that after the thousands of scientific papers establishing a clear consensus on the reality of climate change; that after the numerous exposÃ©s on the vested interests that fund climate deniers to sow doubt about the threat we face, just as the tobacco companies spent decades funding doubts about the link between smoking and cancer; that after the dozens of economic studies by the most renowned economists in the world that found that pricing carbon is the most efficient and effective way to transition economies to lower carbon outputs; that after all of this we are still fighting to implement a price on carbon.
The Abbott scare campaign about the carbon price will continue, and it will be supported by the usual suspects in our popular media.
Before becoming Attorney-General last month I was the Cabinet Secretary and the Parliamentary Secretary for Climate Change and Energy Efficiency. In that role I led international negotiations on behalf of Australian on climate change, including at the 18th Conference of Parties to the United Nations Convention on Climate Change in Doha. While the progress we made toward a global agreement to reduce emissions there was modest, I was again greatly heartened by the fact that people from all around the world are working with passion and with determination to meet the climate challenge we collectively face.
From this year more than 50 national or subnational regions around the world will have a price on carbon pollution covering around 1.1 billion people globally.
Australia is responsibly playing its part. Our carbon price is already cutting dangerous carbon pollution to slow the devastating effects of climate change.
Last month we saw President Obama again emphasising the importance of global action, calling on congress to bring in a carbon price. President Obama said:
“I urge this Congress to get together to pursue a bipartisan, market-based solution to climate change — like the one John McCain and Joe Lieberman worked on together a few years ago. But if Congress won't act soon to protect future generations, I will.”
The McCain-Lieberman bill was an emissions trading scheme, a market based mechanism just like Australia. Here we have this Leader of the Opposition claiming he is at one with President Obama on climate change - another astonishing example of the denial of reality by the Leader of the Opposition.
This phoney claim about President Obama’s position is linked with Mr Abbott’s ludicrous claims that the world is not acting on climate change. According to Mr Abbott,
“… there is no sign, no sign whatsoever, that the rest of the world is going to do things like introduce carbon taxes or emissions trading schemes.”
No sign at all, except from China, Korea, the United Kingdom, France, Germany, Italy, Canada, New Zealand, Japan, South Africa, the United States and another 40-odd countries.
The Leader of the Opposition's rejection of sensible, serious, careful action on climate change goes against the wisdom of every living Liberal leader, other than himself, against the wisdom of every leading scientist and economist, of prime ministers and presidents around the world, and against plain common sense.
I won’t go into a criticism of the Opposition’s economically and environmentally farcical ‘direct action’ policy here, other than to dismiss it as the policy fig leaf that no reputable economist in Australia will support, and that even Malcolm Turnbull has acknowledged is essentially a do nothing policy.
There is no doubt that we have a huge political battle before us to ensure that Australia continues to move to a low carbon future. We’ve seen what conservative state governments do to climate change policy when they take office. There is no doubt that the Federal Opposition, should they win in September, will do far worse in seeking to wind back the vital reforms to our economy that are now under way.
I don’t want to finish on such a dark note, and I must say, I have always been optimistic about Australia and Australians. While the Opposition may be stuck in the trenches of denial, or in the pockets of their corporate cheerleaders, it is clear that world is moving - in fits and starts - toward pricing carbon.
Generational reforms will always meet opposition. But it is crystal clear that the reforms we are now making to the national economy are imperative to Australia’s future prosperity, and I have no doubt that even the Liberal Party, if not under this leader, then under the next, will come to accept this, and will join us in implementing these historic and essential reforms.
I wish you all the best for this conference.
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