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More support for carbon tax. -

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A fresh report by the Productivity Commission has backed the Government's proposed price on carbon.
Heather Ewart reveals the latest developments.

Transcript

LEIGH SALES, PRESENTER: The Federal Government has seized on a report from the Productivity
Commission today to back its argument that a carbon price is the most efficient way of cutting
emissions. And it's warning that if Australia doesn't act, it risks lagging behind the rest of the
world in tackling climate change.

The report compares Australia to several other nations, though it finds none of them yet has an
economy-wide emissions trading scheme in place.

National affairs correspondent Heather Ewart reports.

HEATHER EWART, REPORTER: The Government wanted evidence it was on the right track in seeking to
impose a carbon tax to reduce emissions and today it claimed to have it, gleefully brandishing a
report from the Productivity Commission comparing Australia to eight other nations - the US, the
United Kingdom, China, Japan, Germany, India, New Zealand and South Korea.

WAYNE SWAN, TREASURER: This report today shows absolutely conclusively that Australia is in about
the middle of the pack, along with the United States and China. And because of that, we are
actually in danger of being left behind. So, this report gives lie to the accusation that somehow
Australia is leading the world. We are not.

HEATHER EWART: The Commission found more than a thousand various carbon policy measures in the
countries studied. No country had an economy-wide emissions trading scheme in place, but there was
a limited ETS covering European Union nations and plans afoot in countries like Japan and South
Korea to introduce them. What the Treasurer seized on was this:

WAYNE SWAN: The means to reduce carbon pollution varies from country to country, but one thing is
very clear from this report: so-called "direct action" policies, direct action policies like Mr
Abbott's, are not only ineffective, they are also very, very expensive.

TONY ABBOTT, OPPOSITION LEADER: The issue here is not climate change; the issue is how you deal
with it. Now there are smart ways and there are dumb ways to deal with climate change. The smart
way is to take direct action, as the Coalition proposes; the dumb way is to damage everyone's cost
of living, damage the competitiveness of Australian industries through a great, big, new tax on
everything.

HEATHER EWART: In what's descended into a tit-for-tat debate on the best way to tackle climate
change, the Opposition Leader had already chosen his backdrop to coincide with the release of the
Productivity Commission report, visiting a coal mine in the NSW Illawarra region. Predictably
enough, he was singling out this point:

TONY ABBOTT: There is no other comparable country which is imposing an economy-wide carbon tax on
itself, there's no other comparable country which is imposing an emissions trading scheme on
itself.

WAYNE SWAN: The other thing that comes out of the report very starkly is that the most efficient
way of achieving carbon pollution reductions is through a market-based mechanism such as a price on
carbon.

HEATHER EWART: The Commission's certainly found that emissions trading schemes offered a relatively
low-cost option for reducing pollution, and that's what the Government was most pleased about,
without going into all the fine detail. But for some the report simply reinforced the obvious.

ALAN MORAN, INSTITUTE OF PUBLIC AFFAIRS: It's a fair reflection on how it places us compared to
about seven countries internationally, and what it demonstrates is what I think most people knew
already, that you have an island which is Europe, which has very high taxes, which has a
cap-and-trade system and various other renewable arrangements in there, and you have the rest of
the world, which have virtually nothing.

HEATHER EWART: Criticism too that the commission wasn't asked to compare Australia with some of its
chief trading competitors.

ALAN MORAN: The countries that weren't examined by the PC have negligible taxes, and these are the
countries that basically can compete against us in resource - for resource markets. We're talking
about Canada and South Africa and Brazil and Indonesia. These have negligible imposts.

RALPH HILLMAN, AUSTRALIAN COAL ASSOCIATION: We compete with Indonesia, we compete with South
Africa, we compete with Mozambique. They're the sort of countries - Colombia. They were not looked
at. And I can assure you that those countries are not imposing any measures on fugitive emissions
from their coal mining industries.

HEATHER EWART: As with any report related to a sensitive political issue, the key players will
always highlight what best suits their cause. For the Treasurer, today's report enabled him to
reinforce the Government's narrative and it's not about to change.

WAYNE SWAN: Australia is in the top 20 emitters in the world. We have the highest emissions per
capita of any developed economy. So Australia is a very big emitter of carbon pollution. And
because we are also a very big exporter of coal and LNG, it is absolutely in our national interest
to price carbon. We need to keep moving if we want to keep up. If we don't act, we risk being left
behind.

RALPH HILLMAN: I think they're making it up and I don't think the report says we are lagging
behind. It says different countries are doing different things.

HEATHER EWART: What matters now is how this report is received by the multi-party committee on
climate change. After all it was commissioned for them. And tonight in a pre-recorded interview for
the ABC's Lateline, key independent Tony Windsor was making positive sounds.

TONY WINDSOR, INDEPENDENT MP: In terms of answering the broader questions: is the rest of the world
doing something?, I think it's pretty obvious to most people now that most people - or most
countries are trying to address this issue, and I've always argued that Australia should play a
role in that and obviously I think the report will add impetus to that role.

HEATHER EWART: The Government is yet to set a carbon price and will be guided by recommendations
from the multi-party committee. Until that happens, this debate drags on.

LEIGH SALES: Heather Ewart reporting.