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Tuesday, 1 November 2011
Page: 7711


Senator HUMPHRIES (Australian Capital Territory) (11:26): I rise to contribute to this debate as a person who has had a longstanding commitment to action on climate change; as a person who has always been prepared to accept the science of climate change and the predominant consensus that climate change is real and is affecting the world environment in an adverse way; and as a person who not only has maintained those convictions over a long period but has actually acted upon them. In 1997, as the ACT's minister for the environ­ment, I was responsible for introducing Australia's first greenhouse gas emissions targets for any jurisdiction—obviously for the ACT. Those targets had the ACT aiming to stabilise its emissions at 1990 levels by about now and reducing its emissions by about 20 per cent on those levels by approximately the end of this decade—targets which incidentally were later dropped by the Stanhope government, but that is another story. So I come to this debate as a person who is serious about climate change and has been prepared to put my actions where my mouth is.

I rise to indicate that I do not support the carbon tax legislation which this government has brought forward. In doing so, I emphasis the non sequitur which many people in this debate have maintained: that, if you do not support this package of bills, this carbon tax which the government promised not to introduce but is now bringing forward for debate and vote, you therefore cannot be serious about climate change. That simply is not true, any more than it is true to say that if you do not support the government's mandatory pre-commitment arrangements for poker machines that you are not serious about reducing harm from poker machines. Or there is the most spectacular lack of logic: if you do not support the government's Malaysian solution, you are not serious about stopping the boats. All of those things are illogical and irrational and in this debate they have a very severe consequence for the quality of life that the Australian people enjoy.

I do not think that this package of bills is the best way to reduce carbon emissions in Australia and I certainly do not think that, even if it were the best way to reduce emissions, it is a step Australians should take. I want to come to my reason for saying that in a moment. Let us assume that this package of measures does reduce carbon emissions in Australia. I think there are a great many inefficiencies in the way that this package has been developed and framed, but I am prepared to concede that it may actually reduce emissions in this country. Let us put aside in that argument the fact—it is not speculation—that in getting an emissions reduction Australians will have to take a cut in their standard of living. On the govern­ment's own figures, some three million households in Australia will be worse off, will have a lower standard of living, because they will be forced to pay higher energy costs and other costs by virtue of this carbon tax.

That shaving of the standard of living of Australians will be particularly severe in my home jurisdiction of the ACT where, on the estimates of the ACT Labor government, some 60 per cent of ACT households will be inadequately compensated for the effects of the carbon tax and 22 per cent of households will have no compensation whatsoever for the effects of the carbon tax. All of those people—the majority of people in the ACT—will have a loss of income and a loss of living standards by virtue of this package.

But let us suppose all of that were somehow to be viewed as a worthwhile way of getting Australia to reduce its emissions. Why would you then say that we should not support this package? The reason is that almost certainly Australia's contribution to reducing emissions by virtue of this package will be cancelled out not once, not twice, but dozens and dozens of times by the growth in emissions of other countries in the world. Australia's efforts through this package will be quite useless in actually reducing the emissions profile of our planet. I say that with no sense of triumphalism or pride. I say as a matter of great sadness that we are unfortunately living in a world where other countries simply are not taking this issue seriously and where the overall picture is one of very serious decline in the level of effort by many nations around the world to do something tangible about this.

Professor Jeff Bennett from the Australian National University's Crawford School of Economics and Government summarised these arguments well in March this year. He said:

The Prime Minister said we've got to do something or else we're going to be left behind—it's important to realise that first of all, very few countries around the world are doing much about this …

And secondly, even if everybody did something about, if all nations in the world did what Australia's doing, still the impact on greenhouse gases in the atmosphere would be so small, [it would] not have any real or meaningful impact on the pattern of climate across the planet.

What that means is that the Australian economy is going to have this quite substantial cost imposed on it, with very little to show by way of benefit."

A good, hard, dispassionate view of the evidence demonstrates without any shadow of doubt that that is true. As the Productivity Commission said earlier this year:

… no country currently imposes an economy-wide tax on greenhouse gas emissions or has in place an economy-wide ETS.

Looking at the evidence across the world, it is painfully clear that that is the case. There is no carbon tax or ETS at work in China, India, the USA or the European Community. If action is not evident in those places, it is very hard to see how the world can meaningfully reduce its emissions. There is zero chance that China or India will adopt any form of serious carbon tax. The United States, Canada, Japan and Korea have all either ditched or indefinitely deferred carbon tax systems.

I want to go through some of the experiences in some of those countries. I make the point here that in the course of this debate many senators such as Senator Wong and Senator Faulkner last night have talked about the initiatives being taken in some other countries. I acknowledge that some countries are doing some quite exciting things in selected areas with respect to emissions. China, for example, is shutting down a number of coal fired power stations. Good on them. But the overall picture in every one of those countries is that these acts of emissions reduction are in enormous contrast to what is going on across the rest of their economies, such as that no country is making a net reduction in emissions now or into the foreseeable future.

Let us talk about Europe. We have been told that Europe has an emissions trading scheme which is something that Australia should emulate in some way and that we should go down this path as well. But let us have a close look at what the Europeans actually do. They do have an emissions trading scheme which raises approximately the equivalent of $500 million a year in Australian money. Let us just think about those figures. Australia's carbon tax is due to raise $9 billion a year when it is fully operational. That is $9 billion compared to the European Union's half a billion dollars. The European Union has 500 million people in it. Its population is 20 to 25 times the size of Australia's. And yet with that huge population it manages to raise just half a billion dollars a year in carbon tax. What kind of impact would that be having on the emissions of Europe? Not very much. The impact on each citizen of the European Union from its emissions trading arrange­ment is approximately $1 per year. The impact of Australia's carbon tax will be at its outset, when it is lowest in price, $400 per person per year. How much more advantage do companies producing emissions in Europe have over Australian companies when they have such a light tax burden compared to what will happen in Australia?

The picture gets no better wherever else you look. In China we are told that exciting things are happening. China's emissions are projected to increase from 1.4 billion tonnes per annum in 2002 to approximately four billion tonnes in 2015. Chinese emissions are expected to grow—this is the estimate of Professor Warwick McKibbin—by 496 per cent on their 1990 levels by 2020. That increase is so massive that in each year on the march towards 2020 it will cancel out everything that Australia could possibly do to reduce its emissions. If we cancelled every emission from Australia tomorrow the benefit to the world's emissions profile would be cancelled by increases in the Chinese economy alone in the space of less than one year. The United States toyed with the idea of an emissions trading scheme, using a cap and trade system. That was indefinitely deferred, some would say abandoned, some time ago. President Obama has stated openly that electricity prices in America would skyrocket under a cap and trade scheme. A senior Republican member of the Energy Independence and Global Warming Committee of the US House of Representatives said any kind of carbon tax is dead in the US. Of course, he is right.

The picture in other countries is much the same. In India, which contributes 4.8 per cent of global CO2 emissions, emissions are increasing at the rate of 8.7 per cent per annum. It went to the Copenhagen confer­ence a couple of years ago promising to reduce the emissions intensity on their GDP by 20 to 25 per cent, but the analysis of that offer is that it would mean an increase in India's CO2 emissions by 350 per cent on 1990 levels by 2020. Japan contributes 4.3 per cent of global emissions. It has postponed consideration of the start of an emissions trading scheme until after 2013. Russia contributes 5.5 per cent. Its offer at Copenhagen was, on the face of it, an emissions cut of 15 to 25 per cent, but when you look at the detail you will see that it would increase its emissions by 26 to 43 per cent in the period 2005 to 2020. Other countries are not taking steps to reduce their emissions on a scale that would make anyone believe realistically that Australia's contri­bution will make any difference whatsoever.

People can interpret those facts in different ways. Some people have said that Australia needs to be in the vanguard, that it needs to be on the crest of a wave of change and even that it needs to be able to demonstrate leadership. They say we need to do something that will inspire the rest of the world to follow our lead. Arguments like that turn the disciples of science, the adherents of objectivity in this debate, into people who are relying on effusion and emotion to be able to get to the point of reference. They engage in a leap of faith that, by doing this, somehow Australia will generate the change it wants to see happen in the world. It is possible that other countries will say to themselves, 'Look at plucky little Australia cutting its standard of living in order to show us how it is done, how to reduce our emissions. We feel ashamed of what we're not doing in the face of what Australia's doing. We'll go down that path as well. We'll start to cut our living standards. We'll start to put up our energy costs. We'll start to make our businesses a little bit less competitive by doing what Australia is doing.' Or those other countries, particularly countries like India and China with fast-growing econo­mies, could say, 'Well, the countries of the West, countries like Australia, have got to their very high standard of living over several centuries by despoiling their environments, by cutting down their trees, by ruthlessly exploiting their mineral resources and by pumping carbon into the atmosphere. It's only fair that they should now take a bigger hit than we do when it comes to reducing emissions. We want to reach their standard of living. Let them do the heavy lifting on carbon reduction for a couple of generations, and then we might think about following suit.' Of course, on the side of that argument is self-interest. Someone once famously said that you should always back self-interest in any debate.

I do not see anywhere the evidence of Australia's making a difference by reducing its emissions in the way proposed in these carbon tax bills. I think there is a very plausible and very powerful argument that says Australia should go back to the rest of the world and say that we all work together to reduce the scale of this problem, to attack this issue, that we all make sure we are all on the same page and that we all subscribe to some kind of global scheme that will actually reduce the trajectory of emissions, not notionally and not in a token way, and then we force the rest of the world to say, 'If we do not act together we do not act at all.' That is a gamble; I acknowledge that. But the fact is that at the present time we are fooling ourselves and deceiving the citizens of our country by suggesting that by passing this package of legislation we are going to make a difference to the warming of the world. Even with, as I have indicated, my strong belief in anthropogenic global warming, I do not see how unilateral actions by Australia in this way, coming at the cost they do to the standard of living we enjoy, can actually make the difference that needs to be made to address this issue.

There are of course other alternatives. The coalition's alternative is to invest directly in measures that will effectively go into the marketplace and buy the level of emissions that we want to see happen. I am confident that those measures would produce a reduction in Australia's greenhouse targets of five per cent on 1990 levels by 2020. I prefer those measures in this debate, because the cost of those measures is not at the cost of Australian's standard of living in circum­stances which do not produce benefits to the world as a whole. Australia should stand ready to take action to be part of a global movement to take action that will make a difference, but it is quite pointless, in fact it is counterproductive, for Australia to pretend to be acting on this when, in fact, it is not. A carbon tax, in the absence of comparable action elsewhere in the world, provides an incentive for jobs to go offshore, for us to lose the benefits of a competitive market­place and for us to be left behind. I am all in favour of symbolism when appropriate, but not on such a stupid scale.

I think it is important for the government to be able to explain on a more mundane and domestic level how it is proceeding with such a major reform to the Australian econo­my when it does not have the support of the Australian people for that change. The point has been made in this debate already that the government introduced this tax after it expressly said before the last election that there would be no carbon tax under this government. The Prime Minister went on to say after that that she would act to move forward on this issue when she had built 'a deep and abiding consensus' on the need for this kind of action. It is evident from the most recent opinion polls and from the talk on the streets of Australia in which all of us, I am sure, have been engaged that there is no deep and abiding consensus. In fact, if there is a deep and abiding consensus, it is in favour of not going down this path at this point in time.

So on all those counts—on the count of its being ineffective, being a breach of trust with the Australian people and not being thought through—this carbon tax package is wrong. The coalition has indicated—with perfect justification, I think—that, if it goes to the next election promising the Australian people that it will repeal this tax and it wins the election, it has a mandate to remove that tax. I hope that those opposite, in the hubris which goes with having done deals to impose this tax on the Australian people, would at least acknowledge that the honourable thing for them to do would be to support such a repeal if it transpires that that is the result of the next election. (Time expired)