Senator CAROL BROWN (2:14 PM) —My question is to the Minister representing the Prime Minister, Senator Evans. Can the minister outline to the Senate how setting a carbon price will help Australia become a clean energy nation?.

Senator CHRIS EVANS (Minister for Tertiary Education, Skills, Jobs and Workplace Relations) —I thank Senator Brown for her question. Pricing carbon is an essential economic reform, and it is the right thing to do. A carbon price is a price on pollution. It is the cheapest and fairest way to cut pollution and build a clean-energy economy. The best way to stop businesses polluting, and to get them to invest in clean energy, is to charge them when they pollute. Australia, as we all know, has one of the most carbon-intensive economies in the world. Per head of population we have the highest emissions of any developed country, emitting around 27 tonnes of carbon per person per year.

A clean-energy nation is in the national interest. The longer we delay, the harder the adjustment will be. The global renewable energy sector is already taking hold. In 2009, for the second year in a row, both the United States and Europe added more power capacity from renewable sources such as wind and solar than from conventional sources. The government wants Australians to benefit from this new green boom, not get left behind.

Change is difficult, but we have to start now—and we do need leadership from our politicians. Major economic reform does require leadership. In the 1980s Labor in government made the tough economic reforms to deregulate our economy and bring down tariff walls. It was not easy but it did create new jobs, it changed the face of others and we reaped the benefits of that reform. And we can reap the benefits of a transition to a clean-energy economy. What we need to do is to act in the national interest, to take on these difficult challenges and to provide business with the certainty they need. Business need to know how we are going to progress with these matters so they can make the investment decisions that we need, and unless we give them that certainty we will be held back. This is important economic reform, and I hope the parliament will support it in due course. (Time expired)

Senator CAROL BROWN —Mr President, I ask a supplementary question. Can the minister explain to the Senate how setting a carbon price is the most efficient way to cut carbon pollution?

Senator CHRIS EVANS (Minister for Tertiary Education, Skills, Jobs and Workplace Relations) —A clean-energy nation means harnessing the next generation of renewable energy. Australia has an abundance of renewable energy. We are lucky to enjoy an abundance of solar, natural gas, geothermal and wind resources. It is now time to turn our comparative advantage in these resources to cutting carbon pollution. A carbon price will change this by putting a price tag on carbon pollution. Big business will be aware of their pollution because they will have to pay for it. Households will be aware of the carbon pollution produced by the goods and services they consume because prices of high-polluting goods will be higher than prices of goods which produce less pollution. It will send the signals for business to innovate and find ways to reduce carbon pollution. It will send the signals to households to switch to goods and services which produce less pollution. It is a market mechanism, one that will drive investment to give us a cleaner economy. These changes are necessary both for our climate and for our economy. (Time expired)

Senator CAROL BROWN —Mr President, I ask a further supplementary question. Can the minister advise the Senate whether setting a carbon price is important for creating investment certainty?

Honourable senators interjecting—

The PRESIDENT —Order! When you have finished debating across the chamber, we will proceed—simple as that. Senator Evans.

Senator CHRIS EVANS (Minister for Tertiary Education, Skills, Jobs and Workplace Relations) —Thank you, Mr President. Without action we will lock in high-polluting infrastructure and investments. Anyone with a serious interest in public policy in this country knows that. That would make the transition more difficult and more costly.

Opposition senators interjecting—

The PRESIDENT —Order! Senator Evans, resume your seat. When we have silence we will proceed.

Senator CHRIS EVANS —We emit carbon pollution because there are no economic consequences for doing so—it does not cost us anything to emit carbon pollution. We cannot see it, we cannot hear it but we know that the effects on the environment are very real. We need to make renewables and low-pollution energy more competitive. Currently, low-pollution energy resources, such as solar and wind, cost more than coal-fired electricity. Renewables cost more under the current system. We need to change the economics. A carbon price will make cleaner energy more competitive and, because it prices pollution, it can also be used to assist households with rising costs. This is important so we can create investment certainty and move to a lower pollution economy. (Time expired)