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Monday, 3 March 2014
Page: 1344


Ms PARKE (Fremantle) (15:57): In this debate on the address-in-reply, I would like to make some comments about Australia's investment in its future, specifically its investment in the protection of our environment and biodiversity and its investment in the clean and sustainable industries that should be the basis of economic activity in the decades ahead. Like many people, I am concerned that under this government Australia will turn away from the fundamental understanding that our environment is not something to be considered simply as a resource to be tapped or churned but is in fact the foundation of our future wellbeing in every aspect: social, physical and emotional, as well as economic.

On this point I note the submission the Australian Conservation Foundation has made in relation to the 2014-15 federal government budget. That submission includes reference to the observation from Treasury's Intergenerational report from 2011 that 'few countries have incorporated the potential impact of policies related to environmental issues into the long-term fiscal projections'. Needless to say, Australia is not one of those few countries.

I am concerned that under this government we are already seeing a rapid retreat from the significant gains made by the Labor government when it comes to tackling climate change, improving marine conservation, improving environmental regulation as a whole and supporting renewable energy and energy efficiency. There seems little doubt that the government's role as the custodian of our shared environmental wealth and as the way finder on what should be our path to sustainable economic and social wellbeing is in the process of being abdicated by the coalition. This abdication is occurring across the spectrum of government responsibility. It is occurring when it comes to environmental regulation. It is occurring on the expenditure side when it comes to government support and investment. And it is occurring on the revenue side when it comes to the price on carbon, the introduction of an emissions trading scheme and the receipt of a fair contribution from the profits of resources companies.

Australians understand that if you want to invest in a burgeoning sustainability sector the funds have to exist to make that investment, just as public investment was once made in the creation of our existing stationary energy and distribution infrastructure. Australians understand that if you want to minimise the costs associated with climate change there needs to be structural reform to ensure that carbon emitters are responsible for the costs they have produced.

Why price carbon? The answer is from a first-year economics principle. Pricing the externality is the most efficient way to reduce the externality. As Christine Lagarde, the head of the International Monetary Fund, put it last week, externality has a cost. We can either deal with that cost by putting a price on it and allowing the market and companies to innovate to reduce emissions in the most efficient way for their business, or we can allow the externality to not be priced and emissions to continue. In the latter scenario, the cost will be borne by the government, the taxpayer and, ultimately, all of the community.

People want effective action. They want it to be achieved at least cost and they want it to be paid for by a fair and effective mechanism. The whole rationale of an emissions trading scheme is that the burden of addressing the impact of carbon pollution falls on the polluters, with a corresponding market impetus for business and households alike to reduce carbon emissions.

The Abbott government's Direct Action policy has three massive flaws: firstly, it is quite possible they will not achieve the reduction target of five per cent on 2000 levels by 2020 to which we have committed. In other words, it will fail its basic purpose. Secondly, it will be paid for by the taxpayer, with no contribution from the polluters themselves and no encouragement for polluters to reduce their emissions other than in the form of payments from the taxpayer to do so. And thirdly, it is a matter of common agreement that Direct Action is the most expensive way to seek a reduction in carbon emissions. Prime Minister Abbott has already indicated that if the Direct Action policy costs grow beyond his expectations, which everyone predicts they will, then the target itself will be moderated.

It is instructive to remember the environmental, social and economic task we are engaged in here. The existing reduction targets that form the basis of our commitment are designed to limit the average temperature increase to two degrees over the course of this century. To give a sense of how two degrees of warming—while significant and harmful in itself—is possible to manage while a higher temperature rise is not, I refer to a comment by Professor John Schellnhuber, Director of the Potsdam Institute for Climate Impact Research, on the difference between two degrees and four degrees of warming. He says:

The difference is human civilisation. A 4 degree C temperature increase probably means a global [population] carrying capacity below 1 billion people.

It is a sobering statement. I am grateful to have encountered it in John Wiseman's excellent essay Climate change: reconnecting politics with reality from the collection Pushing our Luck: ideas for Australian progress.

At this point, it is relevant to note that last week the Climate Change Authority provided its latest update, which recommends that Australia target a minimum 15 per cent reduction. Labor provided for the need to go higher than five per cent. It seems overwhelmingly clear that much higher reductions are essential and should have been committed to before now. It was nearly two years ago that the World Bank, in its Turn Down the Heat report, stated that:

Even with the current mitigation commitments and pledges fully implemented, there is roughly a 20 percent likelihood of exceeding 4°C by 2100. If they are not met, a warming of 4°C could occur as early as the 2060s.

That is why we need to keep the gravity of this issue front and centre of the national policy conversation in Australia.

The former Labor government was both clear and courageous in establishing a mechanism that properly attributed the cost of carbon pollution and properly derived the revenue necessary to support Australia's shift from a high-carbon to a low-carbon economy—from a traditional hydrocarbon energy production profile to a 21st century traditional and renewable energy mix. Unfortunately, the current government is abandoning that project, and I am concerned that the forthcoming budget will be a document of irresponsibility and neglect on that front.

As I said earlier, acting in the long-term interest of the Australian environment—and indeed the global environment, if you consider our oceans and our climate—requires sound economic management. In fact, such action epitomises sound economic management. Spending money to save the environment is not largesse—it is sensible and prudent action. It is taking out insurance for our children and their children. It is easy to cut these programs now. Trim $650 million from the Murray Darling Basin Plan over the forward estimates and perhaps it inflates your budget bottom line. But what is the long-term cost of this?

Consider for a moment what the science is telling us about the impacts of climate change. If no action is taken there will be a cost to government across a range of budgetary areas—roads and infrastructure, health and environment to name just a few. What will this do for the budget bottom line? Pricing carbon allows us to deal with this challenge now while also allowing our economy to grow. It decouples economic growth from pollution. Australia has recorded uninterrupted growth for 22 years and yet last financial year was the first time this occurred without a corresponding increase in pollution.

Many stakeholders with an active advocacy role in this space show the kind of balance and responsibility needed to achieve change: that is, they are prepared to look at where the revenue will come from in order to underwrite the investments needed. The budget submission I mentioned earlier, from the Australian Conservation Foundation, is a perfect example. That submission identifies savings that are nearly ten times the investments that ACF would like to see made in Australia's sustainable future. Of course, that is possible because the creation and encouragement of greater sustainability is not just about policy settings that fund renewable energy, green infrastructure or water resource research. Greater sustainability and resilience can also be pursued or achieved by ensuring that outmoded or unjustified concessions do not persist in relation to activities or practices that run counter to the principles of a sustainable economy.

Almost two years ago the now Treasurer, standing in London, boldly declared the end of the age of entitlement. The largesse of government would come to an end, he said, and Australians, both households and businesses, would need to stand on their own two feet. We were told companies should not look for government subsidies or support. Yet at the same time, they propose to spend billions of taxpayers' dollars subsiding polluters through a faux climate policy, which no expert believes will meet the emissions reductions targets. The viability gap between clean energy and dirty, which was closing but will now yawn wide again, will continue to be defined as much by the outrageous subsidies for hydrocarbon production and consumption as by the withdrawal of support for renewables and energy efficiency.

As the ACF submission points out it is hard to understand, let alone justify, why special and favourable depreciation rules for oil and gas assets were reintroduced in the early 2000s, after they had been removed as a trade-off for the substantial lowering of the company tax rate. The existing fuel tax credit scheme, which cost $6 billion in 2013-14, is currently the government's 14th most expensive program, costing more than federal government spending on schools. The ACF makes the case for reducing and better targeting this massive concession, with savings of two-thirds by 2016-17. There are aviation fuel concessions and counterproductive exemptions to fossil fuel producers through the Energy Security Fund that could also add up to $2 billion to the budget bottom line. It is common sense that, if you want to encourage a diversified and low-emission energy production profile, you go about that task by supporting renewable energy innovation and/or by ensuring that fossil fuel production and consumption is not unduly buoyed by unwarranted and counterproductive—or, if you like, countersustainable—concessions and subsidies.

On that basis, I urge the government to approach the forthcoming budget with the following in mind: first, that Australia's future wellbeing depends at least as much on the health of our environment as on sustainable economic growth; second, that addressing climate change by reducing carbon emissions at a much faster rate is essential and it is urgent; third, that the investment needed to improve resilience and sustainability should be funded from revenue derived by the application of a fair impost on carbon pollution and resource extraction; and, fourth and finally, that progress towards a low-carbon Australia and an Australia that is a leader in renewable energy production and innovation can be hastened by ensuring a level playing field without undue subsidies or concessions for fossil fuels.

I return to the wise words of Mr Wiseman, from the essay I referred to earlier:

The economic growth debate is … best framed not in terms of 'growth' versus 'degrowth' but as a shift in priorities from limitless growth in the consumption of energy and resources to improvement in important social and ecological priorities. In Prosperity without growth: Economics for a finite planet, UK economist Tim Jackson makes a compelling argument that our ability to 'decouple' conventional economic growth from ecological destruction is highly questionable and that our focus must be on a redefinition of prosperity— a vision 'in which it is possible for human beings to flourish, to achieve greater social cohesion, to find higher levels of wellbeing and yet still to reduce their material impact on the environment.'

I know that kind of reframing represents a big change. I know it represents a shift from the current state of play, in which we remain fixed on the idea that growth can and should continue indefinitely—however much basic logic tells us it cannot be so. In a brilliant book entitled A Short History of Progress, Ronald Wright notes the lessons of the past:

That the health of land and water—and of woods, which are the keepers of water—can be the only lasting basis for any civilization's survival and success … If civilisation is to survive it must live on the interest, not the capital of nature.

He goes on to say:

Capitalism lures us onward like the mechanical hare before the greyhounds, insisting that the economy is infinite and sharing therefore is irrelevant. Just enough greyhounds catch a real hare now and then to keep the others running till they drop. In the past, it was only the poor who lost this game, now it is the planet …

Things are moving so fast that inaction itself is one of the biggest mistakes. The 10,000-year experiment of the settled life will stand or fall by what we do, and don't do, now. The reform that is needed is not anti-capitalist, anti-American, or even deep environmentalist; it is simply the transition from short-term to long-term thinking. From recklessness and excess to moderation and the precautionary principle.

The great advantage we have, our best chance for avoiding the fate of past societies, is that we know about those past societies. We can see how and why they went wrong. Homo sapiens has the information to know itself for what it is: an Ice Age hunter only half-evolved towards intelligence; clever but seldom wise.

We are now at the stage when the Easter Islanders could still have halted the senseless cutting and carving, could have gathered the last trees' seeds to plant out of reach of the rats. We have the tools and the means to share resources, clean up pollution, dispense basic health care and birth control, set economic limits in line with natural ones.

If we don't do these things now, while we prosper, we will never be able to do them when times get hard. Our fate will twist out of our hands.

On behalf of my community in Fremantle and communities throughout Australia, I want to be one of the many people who are prepared to have this conversation and to argue the merits of taking a radically different, massively important shift in perspective.