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Tuesday, 11 October 2011
Page: 11350


Mr MARLES (CorioParliamentary Secretary for Pacific Island Affairs) (11:12): I rise to speak in support of the Clean Energy Bill 2011 and related bills which form a scheme of legislation to put a price on carbon emissions within our economy via a market mechanism. We will do this by issuing permits to those companies who emit more than 25,000 tonnes of CO2 every year, and that equates to about the 500 largest carbon emitters in our economy. The price of these permits will, in the first year, be $23 a tonne and in years 2 and 3 will increase by about 2.5 per cent. Thereafter, the price of those permits will float and they will become tradeable.

It is predicted that this will give rise to an increase in prices within our economy which will equate to just under $10 per household. Half the money which is raised through the selling of these permits will go to low- and middle-income households to enable them to deal with the increase in prices. That will be done by tripling the tax-free threshold, by giving rise to tax cuts and by increasing benefits through the family benefits scheme. In this way 400,000 Australians will get 120 per cent of that $10 increase. That is to say that they will be better off at the end of this. At least two-thirds of Australians will have the full amount of that price increase provided to them through tax cuts and pension increases. Ninety per cent of Australians will get some form of compensation. In this way, it is important to understand that the carbon price will be funding tax cuts and pension increases for ordinary Australians. It is also important to understand that half of the money that will be raised will go to assist those industries, particularly emissions-intensive trade-exposed industries, so as to secure those jobs at those companies. That is a very important element of this scheme. While there are many companies which will have an ability to pass on costs associated with the carbon price, there will be some which are in a difficult situation within the economy, so they are being provided with assistance.

In my electorate of Corio, both Shell and Alcoa, for example, will be shielded from the carbon price to the extent of almost 95 per cent of the permits that they will be required to purchase. That is a very big win for the people of Geelong and for the economy of Geelong. I have spoken in depth with the companies within my electorate which are faced with paying the carbon price and I want to thank them for the constructive way in which they have worked with me and with the government in working through this package. I do believe that the package as it is now established minimises the effect on those businesses and I think that that is their view as well.

Economy wide, we are talking about a relatively small change to the economy—relative, for example, to the impact of the GST. This is, crudely speaking, going to see an increase of about one per cent in prices in our economy, with a corresponding package which will compensate people for that one per cent. That compares to nearly 10 per cent each way which applied to the GST.

My electorate of Corio, in my view, is very much on the front line of this debate. In what is the most carbon intensive economy in the developed world, Geelong is perhaps the most carbon intensive city within Australia. We have an aluminium smelter. We have an oil refinery. We have a car plant. We have cement works. We have other manufacturing. So any suggestion or proposition to place a price on carbon is obviously met with intense interest in the electorate of Corio. At the same time, of course, we are a seaside city. Much of that industry is located on the coast. We also have a vibrant tourism industry focused on the Great Ocean Road to the south-west of Geelong, which is a tourist attraction based on the current configuration of our coastline. So any talk about a rise in sea levels will directly affect Geelong. Indeed, being in south-east Australia, a part of the world which is predicted to see less rainfall as a result of increasing global temperatures, we are also a part of the world which is water stressed. So on both sides of the debate this is an issue which is felt very intensely within the electorate of Corio, and I think you can see that by the way in which the Geelong Advertiser has—I think very fairly—covered this issue.

I have been involved in holding many forums of businesses that would be affected by the carbon price, of people who work for those companies and indeed of groups that are very keen to see this country act to meet the challenge of climate change. What I take from that is not a sense that people want to plunge their heads into the sand but quite the opposite: a sense that people want to see this challenge met, that we meet it and we do it right and that, in placing a price on carbon, we do so in a way which gets it right. I very much believe that the package of bills which is before this parliament today does that.

The starting point in this debate is about the whole question of climate change. It amazes me that there is still a debate in this country about whether or not climate change is real, yet we very much see comments from the other side of this parliament which time and again make it clear that there are people on the other side of the parliament—indeed, a large number—who frankly believe that climate change is not real. The member for Gilmore referred to the IPCC findings, for example, as being 'very dubious scientific assumptions'. The member for Hume said:

… the argument that a reduction in carbon dioxide will somehow prevent future drought, or even increase rainfall, is entirely spurious.

And we know what the Leader of the Opposition says about this debate in his private moments—or not-so-private moments.

The science of this, in my view, is pretty simple. We are experiencing unprecedented levels of carbon dioxide in our atmosphere. Ice core samples, which are the most reliable way of seeing the levels of carbon dioxide in past times, take our time line back about 800,000 years. In that time, the levels of carbon dioxide in the atmosphere have been accurately recorded between 180 and 300 parts per million. In 1830, before the Industrial Revolution, the level was 280 parts per million. Now that figure is at 390 parts per million. That is an uncontested fact. There is not a scientist on the planet who contests that proposition. That is the first point.

The second point is this. There are a number of scientists who ask, 'If there is such a fundamental change in our atmosphere going on, what will this mean?' so many, many scientists have attempted to model the fact of the high levels of CO2 within our atmosphere. The vast preponderance of scientists who have modelled this have come up with the conclusion that it will result in a change to our climate which will see temperatures go up and, as a result, sea levels go up. That the vast preponderance of scientists have that view is also an uncontested fact. There are some scientists, a small minority, who model this in a different way, but the vast majority model it with predictions of an increase in temperature. That is the second point.

The third point is this. We are starting to see, right now, results in our climate which are consistent with the vast preponderance of those models. We have just lived through the hottest decade that has ever been recorded since records have been in place on this planet.

So we have those things: an unprecedented fact, which is uncontested; a series of modelling, the preponderance of which predicts that temperatures will rise as a result of that fact; and our now experiencing and witnessing temperatures rising. Does that mean that we are certainly going to see climate change? It does not. It might be that the small minority of people modelling this problem may be right. Is it right that we can definitely say that Hurricane Katrina or the Queensland floods were a consequence of climate change? Of course, we cannot say that about either of those particular events. Because of that, this is fertile ground for people to go out and reject the science. But, in doing so, they do not ask the fundamental question, which is this: is there a sufficient risk, right now, given the science and given this uncontested change in our atmosphere, that it will give rise to climate change and all the catastrophic consequences which are predicted to arise from that for our children and our grandchildren?

Clearly, the answer to that question is: the risk is sufficient and we should be acting as public policy makers. In truth, we have been able to answer that fundamental question with certainty for more than a decade. This is the precautionary principle. To not see that now is to wilfully plunge one's head into the sand. History will condemn those people who plunge their heads into the sand and do not deal with this issue now.

In my electorate of Corio the very large companies who will be bearing the issues of the price on carbon absolutely understand the issue here. The Shell company said, 'Shell shares the widespread concern that the emission of greenhouse gases such as CO2 from human activities is contributing to global climate change.' Alcoa said, 'Alcoa supports an economy-wide response to the challenge of climate change.' Ford said, 'At Ford, we acknowledge the science of climate change.' There is no doubt that those companies understand the risk that is at hand.

The global challenge often articulated in this issue is trying to lock in a climate change increase of two degrees or less, which involves stabilising CO2within our atmosphere at 450 parts per million, which the CSIRO said will involve halving CO2emissions by 2050. This is expected to mean very significant changes within our lifetime: two billion people exposed to water shortages and 30 per cent of plant and animal species put at risk of extinction.

What we are doing today is playing our part in meeting that global challenge. This government does understand that our emissions compared to those of the rest of the world are relatively small. There is a bigger reason now for us to move via this legislation—that is, the rest of the world is moving and we cannot afford to be left behind. Thirty-two countries have walked down the path of dealing with climate change through an emissions trading scheme or some other form of abatement policy, as have 10 US states—and California will be starting an emissions trading scheme at the beginning of next year. Most importantly, China is cutting its emissions per unit of GDP by 40 per cent to 45 per cent by 2020 on 2005 levels, ensuring that 15 per cent of its energy needs by 2020 will be through non-fossil fuels. It is increasing its forestation. It has the largest renewable electricity generation capacity in the world. Thirteen districts in China are trialling low-carbon plans, including looking at CO2 emissions trading schemes. Where China goes, the rest of the world will follow.

That is good news from the point of view of dealing with this global challenge; but, in a world where having a CO2 dependent economy is penalised—and we have an economy which is the most carbon dependent in the developed world—Australia will be particularly exposed. We cannot afford to be left behind with such an economy; to do so puts at risk future jobs and future industry. This demands that we act now. How we act is the easiest question in this debate. The most important social phenomenon which has existed over the last 200 years—the power of the market—must be harnessed in the most efficient and least costly way to deliver this change.

Putting a price on carbon will encourage new industries and new solutions. We do not say whether it is gas, whether it is solar or whether it is wind, because we are not about picking winners; if the incentives are right within the economy—and this package will ensure that they are—we know that companies will put their best and brightest to work so that they get the right solutions. We know a market mechanism is the best. Malcolm Turnbull understands that a market mechanism is the best. Greg Hunt wrote theses about a market mechanism being the best way to deal with this issue.

Walking down the path of a direct action policy is not a serious contribution to this debate. We know that this is a policy which, in the words of Ross Garnaut, 'would have some rationale if we wanted to pretend to take action against climate change but not do much'. That is exactly what we are seeing in relation to the direct action plan.

Abraham Lincoln once said:

… we cannot escape history. We of this Congress and this administration, will be remembered in spite of ourselves. No personal significance, or insignificance, can spare one or another of us. The fiery trial through which we pass, will light us down, in honor or dishonor, to the latest generation.

This debate and this vote, more than any other we have seen in this place, will be scrutinised and remembered by history. It will condemn those who vote against it. It will particularly condemn those who know in their hearts that this is the right way to go but do not vote in accordance with their beliefs.