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Wednesday, 10 October 2012
Page: 11911


Mr MURPHY (Reid) (20:14): With great respect to the member for Hughes, the real legacy of this debate will be its failure to address climate change, which is what these clean energy bills seek to do tonight. Nothing demonstrates the harmful effects of global warming on this country better than the large-scale drying out of the Murray-Darling basin. The opposition is continuing to deny the reality of the damaging effects of carbon dioxide emissions on the climate and to deny the need for any action such as the clean energy legislation before us tonight. Meanwhile, scientists report that at least two climate tipping points have been crossed. What is the importance of a climate tipping point?

Recently, in the Proceedings of the National Academy of Sciences of the United States, Professor Tim Lenton, Chair in Climate Change/Earth Systems Science at the University of Exeter, and other prominent scientists defined a tipping point as:

… a critical threshold at which a tiny perturbation can qualitatively alter the state or development of a system.

In this case, the system in question is the earth's climate. The scientists further stated:

Human activities may have the potential to push components of the Earth system past critical states into qualitatively different modes of operation, implying large-scale impacts on human and ecological systems.

Recent examples include dieback of the Amazon rainforest, decay of the Greenland ice sheet and the potential collapse of the Atlantic thermohaline circulation. Such phenomena have been described as tipping points, following the popular notion that, at a particular moment in time, a small change can have large, irreversible consequences for a system such as the climate. The significance of climate tipping points cannot be understated; yet, if you listen to the Leader of the Opposition or the shadow minister for science, you will hear that such concerns are of no consequence and that Australia should not be participating with other nations in introducing a price on carbon dioxide pollution.

The government has a different view and hence has introduced this raft of bills aimed at incorporating clean energy initiatives into the Australian economy. Research by the South Eastern Australian Climate Initiative—the SEACI—which is a partnership between the CSIRO, the Department of Climate Change and Energy Efficiency, the Murray-Darling Basin Authority, the Bureau of Meteorology and the Victorian Department of Sustainability and Environment, provides evidence pointing to long-term reductions occurring in cool-season rainfall across south-eastern Australia and attributes these changes at least partly to global warming.

Amongst the key atmospheric processes directly affected by global warming and most likely to be responsible for the observed reduction in cool-season rainfall in southern parts of Australia is the Hadley circulation, a large-scale convection of the atmosphere that carries heat from the tropics to the subtropics. In this well-understood mechanism, the ascending part of the circulation produces abundant rainfall in the tropics while the resulting dry air descends in the subtropics at around 30 degrees latitude, where most of the earth's driest regions, including large parts of Australia, are located. Research by SEACI shows that the Hadley cells are expanding with increasing global mean temperature by about 0.5 degrees of latitude per decade, thus pushing mid-latitude storm tracks further south and leading to reduced cool-season rainfall across southern Australia. That is a fact.

If nothing is done to reduce warming, the Hadley cells will expand by around 400 kilometres by the year 2100 with large reductions in rainfall at the edges of the cells—a devastating prospect for the future of Australia's most productive agricultural land, which is in the Murray-Darling Basin. I would have thought that the opposition would understand that a healthy Murray-Darling Basin is absolutely essential for feeding Australia and that they would be supporting these clean energy bills in this place tonight. SEACI program director, Dr David Post, has warned that, if areas south of Sydney experience a one-degree Celsius warming, the average annual rainfall is expected to decline by up to nine per cent and average annual run-off by up to 22 per cent. Dr Post also said that these reductions could double with a two-degree warming.

According to the United States Environmental Protection Agency, we are heading for a global average temperature rise of one to eight degrees by the year 2100, and the temperature rise is currently tracking at the upper limit. Even now, with only half a degree rise in average global temperatures since the 1950s, we are in trouble, yet the coalition's business-as-usual approach to climate change and mindless opposition to these clean energy bills is falsely signalling to farmers that it is currently all right to waste half of the Murray-Darling Basin's water on growing cotton and rice. This is an appalling betrayal of responsible management of our most precious resource.

I will now review the operation of the carbon price. It has been in place for over three months, and the sky has not fallen; the economy is still growing, inflation is low, jobs are being created and, as the independent climate commission noted, from next year 850 million people will live in countries or states with emissions trading schemes.

The opposition's latest deception is to bring electricity bills into question time and exaggerate the impact of the carbon price. The opposition bizarrely blames increases in network costs on the carbon price. The opposition exaggerates the impact of the carbon price by calculating it as a percentage of just one part of the bill rather than the whole bill. That is dishonest. The dollar figures for electricity prices are actually very small as a proportion of the business's total costs. The fact is that, for the vast majority of businesses, electricity costs are two per cent or less of turnover, and that makes the carbon price impact around 0.2 per cent of their total costs.

The carbon price will have a small impact on inflation. Treasury modelling has found the impact would be an increase in the consumer price index of only 0.7 per cent. That is much less than the GST's 2.5 per cent net impact. Overall, inflation was just 0.2 per cent for the first month under carbon pricing. And now we have seen an analysis of inflation expectations on financial markets—and this confirms Treasury estimates of a one-off increase of 0.6 to 0.7 per cent. Investors are saying that the impact of carbon pricing on inflation will be no more than 0.7 per cent. That is a fact.

The Treasury's modelling was one of the most extensive and robust economic modelling exercises ever done in Australia. This modelling confirms that, with a carbon price, strong economic growth will continue, in which gross national income will grow at 1.1 per cent per year to the middle of the century. Real income per person will increase by $9,000 per year from today's levels by 2020. There will be 1.6 million new jobs by 2020. By the middle of the century, carbon pricing will reduce Australia's domestic emissions by nearly half what they would be without a carbon price, a reduction of 485 megatonnes of carbon dioxide equivalent.

The price impacts on households are modest, and tax cuts and pension and other benefit increases will help nine out of 10 households to meet these modest impacts. The New South Wales Independent Pricing and Regulatory Tribunal has determined that the carbon price will add less than $3.30 per week, or around 8.9 per cent, to the average household electricity bill. That is a fact. This is even lower than the 10 per cent impact predicted by the Treasury. IPART's view of the impact of the carbon price is consistent with those of electricity price regulators around the country. Furthermore, the Treasury's analysis shows that the economic cost of the opposition's policy is at least double that of the carbon price.

Last month, the government secured an agreement to link Australia's carbon price with the European Union emissions trading system. From 1 July 2015, Australia's carbon price will reflect the carbon price paid by at least 30 other countries, including Britain, France and Germany. From that time, Australia will enter an internationally linked ETS, where the global market sets the price on pollution, and this means we can reduce carbon pollution at the lowest cost. It is also an important step forward to tackle climate change. And, with emissions trading schemes being developed in China, Korea, the state of California, Canada and South America, it is likely to be the first of many international links that will form a global carbon market. That is another reason why we need to support these clean energy bills tonight. But the Leader of the Opposition likes to distort the facts about international action on climate change. Last year he said, wrongly:

… 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.

Wrong. The world is introducing carbon taxes and emissions trading schemes, and this number will increase, as another 17 countries, across all continents, are currently developing emissions trading policies. These countries believe they must reduce emissions and they understand that the cheapest way to do this is to put a price on carbon. It shows that the Leader of the Opposition is wrong to claim that no other countries are acting. In reality, by linking with the EU, Australia will have the same carbon price as 30 other countries with a combined population of 530 million people.

Last month the opposition leader said, 'There are no developing carbon markets in the Asia-Pacific.' But the fact is that Korea, China, Japan, New Zealand, Thailand, Indonesia and Vietnam have developed or are developing emissions trading schemes as I speak. The opposition leader said hundreds of thousands of jobs would be lost, but last month's labour force figures showed the opposite, as unemployment fell. He said millions of dollars in investment would go offshore, but this too is wrong, as there is more than half a trillion dollars in the pipeline. The Leader of the Opposition predicted massive price increases, but the inflation figures show only tiny price rises in the last quarter. He says countries are not acting, yet every major economy has established policies to tackle climate change. Why does the Leader of the Opposition continue to misrepresent and distort the truth?

More and more, the facts will show how deceptive and hollow the opposition's scare campaign has been in relation to our decision to put a price on carbon. Those opposite are either ignorant of the modelling assumptions or are being deceitful again. Given that the government has been pointing out the errors in their claims for over a year now, one can only conclude that it is deliberate campaign of deception.

Mr Baldwin: Mr Deputy Speaker, on a point of order, did the member breach the boundary when he claimed that we were being deceitful? Previous Speakers have ruled as such.

The DEPUTY SPEAKER ( Dr Leigh ): The member for Paterson will resume his seat. Only the word 'lie' has been determined to be unparliamentary; that is the only word that I am going to pick up on. I call the member for Reid.

Mr MURPHY: The Treasury modelling assumes that there will be an international market that Australia can link into by 2016. This market already exists. There is the European Union ETS and there is the UN Clean Development Mechanism market. In the next few years, as the Korean, Californian and regional Chinese carbon trading markets begin to operate, the prospect for internationally linked carbon markets will keep improving.

The Leader of the Opposition has reiterated that all of the increases in electricity prices were due to the price on carbon. That is false. Unfortunately for the Leader of the Opposition, he was, as everybody knows, immediately— (Time expired)