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Thursday, 29 October 2009
Page: 11580

Mr PRICE (5:34 PM) —I am rather pleased to follow the honourable member for Page. Indeed, she is correct: she is a very influential member of the government, even though a backbencher; she is always harassing our ministers and does so very effectively! I am sure that her intervention, along with that of others, has contributed to the government taking this monumental step in relation to the Carbon Pollution Reduction Scheme Bill 2009 [No. 2] and related bills.

I wanted to start my speech with some history. I am sure people remember that in the mid-eighties a scientist told us we had a real problem with the ozone layer; in fact, there was a hole developing in the ozone layer and it was increasing quite rapidly, as ozone was depleted. I think it is fair to say that ordinary people understood that this was serious—that we were doing permanent, irreversible damage to our planet and we had to do something. I am pleased that substances like the refrigeration gas CFC, which was the cause of the depletion of the ozone layer, were banned. In 1989, Australia ratified the Montreal Protocol on Substances that Deplete the Ozone Layer. No-one suggested we should put an umbrella over the hole, or a shadecloth over the hole, or try to patch up the ozone layer! As individual citizens and as countries we had to take action to reverse this terrible thing, and indeed we did.

The Montreal protocol is widely considered as the most successful international environmental protection agreement. Its achievement of universal ratification in September this year makes it the first international environment treaty to have universal participation. The most recent scientific evaluation of the effects of the Montreal protocol, which took place in 2006, states:

The Montreal Protocol is working: There is clear evidence of a decrease in the atmospheric burden of ozone-depleting substances and some early signs of stratospheric ozone recovery.

Isn’t that fantastic news? Isn’t it fantastic news that, with a problem that is so debilitating and that affects everyone, scientists report on it, ordinary people understand it, governments take action and we implement the changes? These were not easy changes to make but, with the goodwill and support of business and ordinary citizens, we have made a difference. We have started to reverse the terrible damage that we caused. I applaud all Australians—ordinary Australians, the business community and the industries that were directly involved in generating this gas and that had to move away from its use—for what we have been able to achieve by working together. An air-conditioning business, Tempest, in my own electorate had to stop using this gas. They did it and I congratulate the management and their workers for doing that.

We are at the same point with climate change. Ordinary people understand—as the member for Page was outlining—that something is going on with the climate. We have glaciers melting. We face the real prospect of glaciers melting in Greenland, Alaska and the Himalayas because of climate change, and this will cause catastrophic problems. We know that Australia is a ‘funny’ continent in that we can have bushfires in one part of the country, drought in another and floods somewhere else. But, even so, everyone understands that something fundamental has happened with the climate. If you talk to farmers they understand that. They absolutely understand that something fundamental has happened with climate change.

I do not normally quote Senator Heffernan, let alone praise him, but to give him his due he has made some radical suggestions in response, in his words, ‘to whatever it is that is happening’—because he acknowledges that it is. He says that we have to do something; maybe move agriculture to the north. I do not dismiss his ideas. I think he is making a very serious contribution. Senator Heffernan acknowledges that we have to do something. If I talk to the school children and the parents in my electorate, they tell me that they are concerned about what is happening with our climate, and they want us to do something about it. That is why I believe in the Rudd government taking action; it is doing something.

Throughout this debate there have been a number of distractions from the main issue. These are: our targets are too much or too little, we are moving too quickly or too slowly, we are providing too much compensation to emissions-intensive trade-exposed industries or we are not providing enough compensation to emissions-intensive trade-exposed industries. Should we be taking action before Copenhagen or should we wait and see what other nations do? Should we commit to a CPRS while India and China continue to pollute unabated? These are not silly questions and they are entitled to be asked in this forum but, on the matter of this debate, they are no more than distractions.

What might confuse many ordinary Australians about the CPRS—that is, the Carbon Pollution Reduction Scheme—is that it is not a debate about the environment. Sure, there are environmental benefits if we proceed with the scheme and environmental risks if we do not, but the Carbon Pollution Reduction Scheme is a debate about the most significant change to our economy since World War II. Those who are opposed to the introduction of a CPRS rely on a number of untruths to argue their point. For starters, they claim that Australia is going it alone on emissions trading and in a race to do it. That is simply not true. Similar schemes are already operating in 27 European countries. In the United States and Canada, 27 states and provinces are introducing emissions trading to reduce carbon pollution, as is New Zealand. Although there are similar schemes operating throughout the world, I still believe that our position is one of leadership and that it is something we should not shy away from. Australia has too much to lose if it fails to secure emissions trading reductions on a global level.

Climate change is projected to increase the severity and the frequency of many natural disasters such as bushfires, cyclones, hail storms and floods. Projections for Australia include increases in the frequency of heatwaves; increases in the frequency and length of drought conditions, especially in the south-west; increased hail risk over the south-east coastal areas; increases in the proportion of intense tropical cyclones; and a substantial increase in fire-weather risk in south-east Australia. These projections are all from the CSIRO and the Australian Bureau of Meteorology. Australia’s World Heritage properties report, released in August this year, highlighted the vulnerability of Australia’s natural icons and tourist destinations to climate change. These include the Great Barrier Reef, the wet tropics of North Queensland, Kakadu National Park and the Tasmanian wilderness. The Great Barrier Reef alone attracts around two million tourists each year. It supports tourism across the region, generating over $4.9 billion and employment for around 60,000 people.

If we are going to convince other nations to move in this direction, we have to do so from a position of leadership, from a position where we have already acted. Yvo De Boer, the chief executive of the United Nations Framework Convention on Climate Change Secretariat was reported in the Sydney Morning Herald on 6 August 2009 as saying:

I think it helps Australia’s credibility to say this is the target Australia is willing to commit to and this is how we are going to achieve it—that will be good for the country’s credibility.

Even the Leader of the Opposition, Mr Turnbull, used to believe in Australia leading the way on climate change.

Ms Saffin —What happened?

Mr PRICE —Beats me, but there you go. In a Herald opinion piece back in 2008, Mr Turnbull wrote:

… our first hand experience in implementing … an emissions trading system would be of considerable assistance in our international discussions and negotiations aimed at achieving an effective global agreement.

Surprise, surprise! That is exactly what the government is doing, but we do not seem to be able to get the support of the opposition. Another untruth which those opposed rely on is that the Carbon Pollution Reduction Scheme will price fuel and electricity out of the reach of average Australians. Again, I refer to the great contribution from the member for Page who pointed out the lamb chops costing an astronomical amount of money.

Ms Saffin —Barnaby Joyce and his leg of lamb.

Mr PRICE —Barnaby Joyce’s leg of lamb.

Mr Bidgood —He’s a right pork chop, isn’t he, really?

Mr PRICE —He is a bit of a pork chop on this one, as has been pointed out by my colleague. I think I need to get on with my speech. All these things are falsehoods and rely on scare tactics trying to frighten people against the reality of what needs to be done. We need to bear in mind that the purpose of creating this scheme is to challenge each and every one of us to rethink how we use energy and how large a carbon footprint we leave.

Those who decry the cost to consumers often fail to acknowledge the government’s plan to compensate consumers, particularly the most disadvantaged in our community. The government has committed to a 2.5 per cent increase in the age pension. This is not the recent increase, which was quite historic and dramatic; this is an additional increase, an up-front concession increase for self-funded retirees. For ordinary families, there will be increases in the family tax benefit and a dollar for dollar reduction in fuel tax to assist motorists. This compensation will be paid for from a cost charged to polluters for buying carbon permits. The sale of the permits will raise $11.5 billion dollars for the Australian government in 2010-11. Every cent will be used to help households and businesses adjust to the scheme. In other words, yes, the government will be getting $11.5 billion in but it will not be keeping a cent. It will all be going out to businesses and most especially to families, pensioners and self-funded retirees.

Some detractors on the other side would argue that the Carbon Pollution Reduction Scheme will only punish industry and cause them to go out of business—another untruth. Australian industry is much more resilient than that. Look how well we are doing in this global financial crisis. Australian industry will be ideally positioned to lead the world in innovations that will achieve carbon abatement. In fact, the longer we delay, the greater we hold up industry. The longer we delay, the more we miss out on opportunities not only for R&D and for design but for manufacturing and having a smooth transition in our economy.

New technologies for reducing carbon emissions which come about as a result of the Carbon Pollution Reduction Scheme will then be able to be sold around the world as part of a global solution. Treasury modelling projects that by 2050 the renewable electricity sector alone will be 30 times larger than it is today. A 2009 Climate Institute study shows that $31 billion of clean energy projects are already under way or planned in response to the government’s climate change policies. These will generate around 26,000 new jobs, mostly in regional areas.

A number of factors will drive this innovation. First among these will be the need for government incentive and, secondly, the price at which carbon permits are set. These will encourage research and development in new technologies. Rather than hurt jobs, as many opponents have suggested and as we have heard in this place, this scheme is designed to help support the jobs of today while putting in place a scheme which will help create the low-pollution jobs of the future. A target of opposition untruth is the coal industry and how the Carbon Pollution Reduction Scheme will impact on them and on jobs within their industry. The government recognises the importance of the coal industry to our economy and local jobs. That is why we have designed a CPRS—to ensure that assistance is provided to the mines which need it most during the introduction of the scheme. The Australian Treasury has undertaken a comprehensive economic modelling which shows that the coal industry will continue to grow and is projected to increase by more than 50 per cent by 2050. Hurting jobs? That is not a sign of hurting jobs.

It is important to note that a large majority of coal mining is not emissions intensive. Half of all coal production in Australia will have a liability for their fugitive emissions of 80c or less per saleable tonne of coal. Given that coal is currently selling for around $70 to $150 a tonne in export markets, it is misleading to suggest that a carbon cost of this magnitude will lead to decisions to close mines. Would you close a mine if you had an impost of 80c per tonne and you were getting $150 per tonne? I do not think rational or sane businessmen, or even accountants, would recommend that. The government has recognised, however, that the most emissions intensive mines, which represent about 12 per cent of Australia’s coal production, will face a material cost under the Carbon Pollution Reduction Scheme. The government has allocated $750 million in targeted assistance over the first five years to these mines. This assistance will allow emissions intensive mines to investigate and implement abatement opportunities and will ease their transition to the introduction of a carbon price.

In conclusion, I will finish where I started off: what a wonderful example the Montreal protocol is of international action, national action and ordinary people understanding we have a problem. I think that ordinary people well understand that governments need to act, and act now. And if we want to get the rest of the world to act, we cannot take a back seat: we need to have this scheme introduced and proceeding to implementation before that most important international conference at Copenhagen. We need to set an example for others to follow. I strongly support these bills.