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Tuesday, 19 November 2013
Page: 613


Ms OWENS (Parramatta) (12:01): Climate change is real. We know it on this side, it is known around the world and it is known in my community. Unfortunately, it seems that it is not known on the other side of this House in government.

We are already seeing the effects. Even if we took action now we would still be leaving a negative legacy to the next generation and to our grandchildren. We are seeing the increase in extreme weather events and we are seeing very clear statements from the scientific community that we will see an increase in extreme weather events unless we take very real and drastic action. And yet we are standing in a chamber today with a government that either does not believe in climate change or does not care what legacy we leave to the next generation.

We on this side of the House do, and having decided that action needs to be taken the next step is to decide which action. Both sides of this House over many, many years decided that a market-based mechanism—a cap-and-trade scheme if you want to call it that, or an emissions trading scheme—was the best way to go. But now there is quite a division. On the government side we see a sham of a policy: Direct Action. And let's look at what that actually is.

Through this Direct Action policy there is no cap on the amount of pollution that can be produced by the country, but there is this odd approach where the government, with taxpayers' money, pays the polluters to stop polluting. In other words, there is a department somewhere that makes decisions between this big business or that big business—who gets the money to stop polluting and who does not. In many ways it interferes in the competitive process and gives one business an advantage over another in a way that we would never expect a Liberal Party to act. Then, of course, if a business continues to pollute beyond a certain level it is fined—it pays a fine. It is a bizarre policy that we have not really seen any detail on yet. The last time we saw any detail was back in 2010, and we have seen very little since then.

The method that is accepted around the world, and in Australia by the vast majority of economists, as the best method is a market-based mechanism, sometimes called a cap-and-trade scheme, sometimes called an emissions trading scheme and sometimes called a price on carbon. But this is what it does: it sets a cap on the amount of carbon pollution that we produce in this country and reduces it over time to a level where the balance of the amount of carbon pollution that is produced by mankind and that which the earth can absorb is restored so that we have a balance in our world just as we have had over thousands and thousands of years. And then within that cap permits are sold to businesses that will continue to pollute.

Because there is a price then on pollution, businesses will do what businesses will do: they will try and find a way to reduce their costs by not polluting. So what we have then across the economy is literally thousands of small businesses and many big ones trying to find ways to reduce the cost of pollution by finding ways not to pollute. And we already see the dramatic increase in investment in renewables in this country and around the world as industry tries to find ways to reduce the cost of producing pollution.

Those that can find other alternatives will find other alternatives, and we already see local councils capping their waste disposal sites, collecting the methane and selling that methane or converting it to more useful forms. We already see that. We have already seen other areas where this has been done: for example, when councils introduced tip fees to try and reduce the amount of land pollution, if you like. We now see companies that produce tyres as waste material reusing them to make carpet. You can actually see businesses trying to find ways not only not to pay tip fees by throwing material into the ground but to resell and make a profit through their waste.

We are already starting to see that in the scientific community in this country. We see a group of scientists in Perth, for example, who are working and having quite a bit of success in converting methane into hydrogen and into a physical form of carbon rather than hydrogen and carbon dioxide—again, an area of endeavour which would produce significant business advantages for that particular company and for many other companies as well by reducing the very cost of doing business.

Those that cannot find other alternatives under a cap-and-trade scheme continue to pay. As the cap comes down, if they cannot find alternatives the price does actually go up. But as the price of polluting goes up, the incentive to find answers also goes up. So what you find again, as the cap shrinks, is more and more effort put in by the business community to find answers to pollution. It is a really quite elegant economic solution to a quite difficult problem.

On the other side we have the Direct Action policy, which not only does not set a cap but does not really provide any incentive for businesses around the country to find the answers that we need. I know that there are members on the other side that believe that technology will out. We have heard John Howard say that quite recently—that, over time, technology will solve the problems. Well, technology will solve the problems if there is a financial incentive to do so. Technology will be developed and businesses will find the answers through technology—and technology will be developed if there is a profit to be made on it and there is an economic advantage to doing so. The Direct Action Plan does not provide that incentive, which is why it is strange that we have a Liberal government supporting it. What it does is says to a big business that is polluting: 'We will give you taxpayers' money if you stop.' Where in that is the incentive for thousands of businesses to go out and find the answer? Where is the incentive in that for Australia to use its extraordinary talent at finding new answers and to put that talent to work to build a new economy?

We talk about the wealth of Australia being in the ground. In the new world of clean technology we have a wealth of other talent. We have wind, we have sun, we have waves, we have hot rocks. We have everything we need in this country to have a thriving renewable energy market. China in the last year spent more money on renewable energy than it did on coal fired energy in terms of its investment in new assets. That is an indication of the way the world is going. To be sitting in the chamber with a government that does not care whether Australia is in the new industry or not, that is happy to see Australia freeze itself in a carbon economy, is quite bizarre.

Australia has another talent. We have a talent for ideas. We are one of the great innovative nations of the world, perhaps because of our diversity, perhaps because of our background when we became a convict settlement—who knows? But, for whatever reason, we are an incredibly creative nation. We invent above and beyond our weight; we produce scientific publications well above our weight in terms of our percentage of population. It is what we do well. Put the incentive there for business to find new answers and to invest in new technology, combine that with their talent for doing just that and the talent we have in renewables through our natural environment and you have a country that can blossom and prosper in the new world in a way we did in the coal based economy.

At the time that coal was the driver of wealth we had the fossil fuels in the ground. Now, as we move away from the carbon economy to clean technology, we are also the country with the right assets in the right place. We have the right climate, the right environment and the right ability to come up with new answers. A cap-and-trade scheme causes those talents to come together to build a more prosperous nation. The Direct Action Plan not only does not do much for the economy but does not do anything for the environment either. So I would urge the government to rethink its position on this and recognise the extraordinary opportunities for Australia through real action on climate change, not the fig leaf of direct action.