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Wednesday, 3 June 2009
Page: 5381

Mr MARLES (9:14 AM) —Climate change is happening. There is no longer any doubt. The science is completely certain that humans are causing an increase in global temperatures. We can have a debate about how quickly it is happening and we can have a debate about the consequences, although even in relation to that the science is becoming clearer. But it is totally certain that humans are causing an increase in global warming and that the future of the world as a consequence of that is grave. So, more than any other debate that we have had in this place, as we stand here in the House of Representatives on this day, having this discussion, we are uniquely custodians for millions of Australians who are yet to be born, who in decades to come will look back at what we said on this day and at what we did or did not do when we had a chance. That is a responsibility that we cannot avoid, whether we want to or not.

My electorate is based on Geelong, in Victoria, where the consequences of climate change are predicted to be very severe. Industry in my electorate hugs the coast. Our existing coastline is the basis of our tourism industry. If we do nothing, the prediction is that sea levels will rise dramatically over the next century, rainfall will decline and droughts and bushfires will increase. Already we have had water restrictions for 6½ of the last 11 years. Our storage levels on this day are at 18 per cent. Two years ago they were at 14 per cent. They are the two lowest levels recorded—and yet Geelong is a very carbon dependent city. Our transition to a post-carbon world will be as big as that of any other place in Australia, and that is because of our industrial base.

Let me be clear that Geelong’s industry has contributed greatly to the social and economic wellbeing of Geelong. Ford has been making cars in Geelong since 1925 and employs 2,000 people. Shell has been refining oil since 1954, supplies half the petrol to the state of Victoria and employs 500 people plus contractors. Blue Circle Cement produces 700,000 tonnes of cement every year and employs 145 people. Alcoa has been operating for 40 years, supplies 30 per cent of Australia’s aluminium and employs 1,200 people out at Point Henry. When you look at what Geelong faces if we do nothing on carbon, and when we look at what Geelong faces if we do something on carbon, we are unquestionably the town in this country which is at the front line of this debate.

The aim of the government’s policy in relation to the CPRS is to make Australia a credible and robust international player in forming the kind of international agreement we need so that we can change the way humans are impacting upon the global environment. But we need to do that in a way which changes the behaviour of industry in Australia, not in a way which gives rise to carbon leakage or sees industry go overseas.

Placing a price on carbon in our economy through a market mechanism which achieves all those aims is an enormously difficult task of public policy, but it is a task with which the Rudd government has proceeded with a quiet determination which began during the election campaign. That saw us sign up to Kyoto in the immediate aftermath of the election. It saw the Garnaut report last year, the green paper in August, the white paper in December and the Senate inquiry through the first part of this year. All of this has been an exhaustive consultative process requiring a rigorous approach that has led us to this point. We have proposed to the nation a cap-and-trade scheme which will take us to a target of reducing carbon emissions by five per cent by 2020 no matter what. If the rest of the world moves, we will reduce carbon emissions by up to 25 per cent, leading to a total target of reducing our emissions by 60 per cent by 2050. The scheme puts in place significant compensation for emissions-intensive trade-exposed industries and will provide for the money raised through the selling of carbon permits to be used to help transition our economy and our households to a post-carbon world.

In Geelong we have also had an extensive consultative process which began on 11 August last year with a community forum of all the interested players around climate change. I have spoken extensively with the Committee for Geelong, the G21 Geelong Region Alliance, the Geelong Chamber of Commerce, the Geelong Manufacturing Council, the Geelong Trades Hall Council and the City of Greater Geelong. I have spoken with businesses and unions, including Russell Caplan and Huck Poh at Shell; Alan Cransberg, Paula Benson, Tim McAuliffe, Brendan Foran and Kate Betts at Alcoa; Ian Campbell at Blue Circle Cement; and Paul Howes, Cesar Melham, Brett Noonan and Jim Harper from the Australian Workers Union. I am indebted to every one of those people for helping me to understand how an emissions trading scheme would change life in Geelong and how it would have an impact upon people in Geelong. I am also very indebted to the Minister for Climate Change and Water, Penny Wong, who has come to Geelong twice during that time. She has listened intently to what people have had to say and she has explained admirably this very complex problem that the government is dealing with.

I have little doubt that the consultative process that we undertook in Geelong led to the Prime Minister’s announcement on 4 May this year which saw a delay in the introduction of the CPRS by a year, to 1 July 2011. In that first year we will have a set price of just $10 for carbon permits, which is roughly, analysts think, about 25 to 30 per cent of what the market rate will eventually be. We have seen the highest tier of compensation, which was 90 per cent, increase to 94.5 per cent and the next tier of compensation, which was 60 per cent, increase to 66 per cent. I think, as a result of these changes, the scheme that we put before the House today is much more robust. It is an example of the way in which the Rudd government, through Minister Penny Wong, is engaging with the community so that we come up with a scheme for all Australians.

When you look at where we have landed the scheme now, we are getting significant support out there, not least from industry in Geelong. On 5 May this year, Russell Caplan said:

So, while there are important issues still to be resolved in the CPRS, notably how we manage the competitive disadvantage of applying a carbon price in Australia before our trading partners, I believe it is important that we do resolve them, and that our representatives pass this legislation.

Tim McAuliffe, Alcoa’s General Manager Corporate Affairs and Carbon Strategy said to me last night:

We do not, at this time, support throwing out the existing CPRS and starting again—our strong preference is for the Government and Opposition to work together and find a balance that deals with the environmental imperatives but also supports economic and social benefits of Australian industry.

While we have been doing this, where have the opposition been? To put it simply, this is an issue too big for those on the other side of this House to come to terms with. Their response to the whole issue of climate change has been: ‘We’ll get back to you. We’ll get back to you after the Garnaut report, we’ll get back to you after the Treasury modelling and we’ll get back to you after the white paper, the Pearce report and the Senate inquiry. Why don’t we have a productivity inquiry? We will get back to you after Copenhagen.’

What it has meant is that one of the major political movements in this country has left the table of this debate. As we are trying to actually come up with a bipartisan position, where everyone in this country can provide a stable regulatory environment for the future, the opposition have absolutely disappeared. In the future, in decades to come and when people look back at what the opposition have done on this day, they will stand condemned. At best, these are the ostrich parties: the people who have found the nearest sandpit in order to plunge their heads into it. At worst, in the deep dark recesses of their hearts, they are climate change sceptics, which is such a dangerous position to hold in public policy at this moment. Just as they have in relation to the global economic recession, with the heat on with this key piece of public policy, they have gone missing. Business needs certainty. That is why AiG and the BCA are crying out for us to pass this—and, by the way, so are the ACF and the Climate Institute.

There is undoubtedly a moral question in dealing with this issue for the future generations of Australia. For the people of Geelong, this is the smart thing to do. Of course it is impossible to guarantee every single job under the CPRS, but what you can absolutely guarantee is that if we are the last country in the world to move in relation to climate change then we will have no industry at all. An industrial town like Geelong has a great industrial future but only if we come to terms with and deal with the issue of our carbon dependency. We have a bright future in manufacturing in Geelong if we can come to terms with our carbon dependency. But, if we do not, we will find that industry will leave. You just need to look at Alcoa, who have the Point Henry smelter. They have a smelter twice the size in Iceland based on hydropower, with virtually no carbon footprint, and they have it on the books to build a geothermal powered plant there, again with very little carbon footprint at all. If that is not an indication of where we need to go as a country then nothing is. We need to help our industry get past the carbon dependency it has. If we do that, this country has a bright future, and Geelong continues to have a very bright manufacturing future. That is why it is absolutely essential that we pass the CPRS and why I commend this legislation to the House today.