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National Press Club -

View in ParlView


Thank you very much.

It is my great pleasure to be back at the National Press Club, where just over a year ago I
released the Government's Green Paper on the Carbon Pollution Reduction Scheme.

Now, one year on, we are days away from a vote on the Carbon Pollution Reduction Scheme - days away
from a decision on whether Australia will start to reduce the carbon pollution that is causing our
climate to change.

The choice should be clear.

By the end of this century, climate change could see irrigated agricultural production in
Australia's food bowl, the Murray Darling Basin, drop by more than 90 per cent.

By mid century, heat related deaths in Australia could increase by 5000 a year.

And looking beyond our shores, by mid century, rising sea levels will directly affect and
potentially displace over a million people in Bangladesh, the Mekong delta in Vietnam and a little
further afield in the Nile delta, to say nothing of the impact on our neighbours in the Pacific.

Despite these clear facts, delivering a serious and credible response remains a political

We are asking a lot of this generation. We are asking this generation not only to remedy the damage
caused by many decades of high polluting growth - we are also asking today's generations to do
this, in the most part, for tomorrow's generations.

We are, in effect, asking people today to take leadership, for the benefit of all who follow.

It is a big ask. I acknowledge that.

So often, the threat of climate change does not seem immediate.

Nevertheless, while the worst impacts of climate change are yet to be experienced, it is not just a
future problem. Climate change is here, now. The chance to avoid climate change altogether is lost
to us.

We know from the Copenhagen Synthesis Report that temperature rise is already affecting health in
many societies; the increasing number of extreme weather events, such as heatwaves, floods, and
storms, is leading to a growing toll of deaths and injuries from climate-related natural disasters.
The impacts of climate change on water systems are already apparent in many parts of the world.

Now, all we have is a small window to reduce the seriousness of climate change - and that window
will not stay open for long.

The need to act is patent. It is in everybody's interest. Australians demand it.

And this need for action has been clear for quite some time. Leaders and policy makers have had
plenty of time to get their heads around it.

In fact, it's been more than a hundred years since the first realisation that the Earth's climate
might be sensitive to the atmospheric concentrations of gases that create a greenhouse effect.

It's been more than thirty years since the first ever World Climate Conference called on
governments to guard against potential climate hazards.

It's been twenty years since the Intergovernmental Panel on Climate Change was formed and produced
its first report.

17 years ago, in 1992, the international community acknowledged the importance of tackling climate
change at the Rio Earth Summit and created the United Nations Framework Convention on Climate

In signing up to this Convention, Australia and other nations expressed their concern that human
activities were substantially increasing concentrations of greenhouse gases, and agreed that all
countries should be involved in an effective and appropriate international response.

More recently, the Howard Government's own Prime Ministerial Task Group on Emissions Trading
concluded in 2007 that "waiting until a truly global response emerges before imposing an emissions
cap will place costs on Australia" and endorsed the cap and trade emissions trading model.


Any real, credible effort to tackle climate change relies on two fundamental elements: limiting the
carbon pollution that causes climate change, and putting a cost or price on that carbon pollution.

Combining these two elements means we not only start to close the door on climate change, we also
open the door to the investment in low carbon technology that will drive the clean growth economy
of the future.

We can tackle climate change and grow our economy.

But platitudes won't get us there. Vague politically motivated statements dressed up as principles
won't get us there.

Repeating the failed experiments of other nations won't get us there.

Stunts, smokescreens and slogans won't get us there.

Simply adding more and more regulations won't get us there, because it is an economic
transformation that we need.

And even major, direct government incentives will only get us part of the way.

We are introducing laws to massively increase the uptake of renewable energy. The Renewable Energy
Target legislation now before Parliament will ensure that by 2020 the equivalent of all current
Australian household electricity supply comes from renewable sources like solar, wind and wave. But
this won't take us as far as we need to go.

We are directly investing billions in researching and developing clean-energy technologies.

We are directly investing billions of dollars to help Australians install insulation and solar
hot-water systems and put solar panels on their roofs - and Australians are responding

I want to see the day when there is a solar panel on every roof, and insulation in every home,
because we all need to do our bit.

But even that will fall a long way short of what we need to do. I asked the Department of Climate
Change whether we could reach our 25 per cent target if every dwelling had a solar panel. Their
advice is it would cost over $200 billion, and we could get less than one twentieth of the way.

In other words, if tackling climate change were a journey from Sydney to London, solar panels would
get us started, but would not get us to the South Australian border.

The inescapable conclusion is that we need to do more. Climate change is a challenge too great in
scale for conventional measures alone.

Just yesterday I released the latest Tracking to Kyoto and 2020 projections, which show that unless
the Carbon Pollution Reduction Scheme becomes law, our emissions will be 20 per cent higher in 2020
than they were in 2000.

To put that in perspective, a 20 per cent increase is the equivalent of more than doubling the
number of cars on our roads between now and 2020.

Any politician who tells you there's an easy way to tackle climate change is having you on.

Climate change is a difficult and fraught policy challenge. It is full of hard but necessary
decisions and leadership from all sides of politics is the essential ingredient in delivering a

We need to fundamentally change the way our economy works, so it no longer relies on the
carbon-intensive energy and processes that have fuelled it until now.

We know what we need to do. We know we need a price on carbon pollution. We know we need cap and
trade emissions trading.

Everyone from John Howard to Malcolm Turnbull to the G8 has agreed.

The only way we can deliver the scale of reductions we need is with laws that put a hard, limit on
carbon pollution, and make those that produce carbon pollution pay for it.

The only way we can deliver the scale of reductions we need is with the Carbon Pollution Reduction

What we need to do is clear. What remains to be seen is whether Australia's politicians can
demonstrate the kind of leadership required to do what we know is right.


Nicholas Stern has characterised climate change most helpfully for policy makers, as a failure of

Normally, the market factors in costs. But until now, the market has not factored in the costs - or
to use economic language, the externalities - that climate change is imposing on the planet and
future economic circumstances.

Turning this around requires a global economic transformation that is, simply, unprecedented.

Turning this around requires giving a value to the planet and the future by putting a price on the
things that are doing them harm.

Turning this around means changing the way we do business. It requires putting a price on carbon.

Only when we reflect the cost of climate change through a price on carbon will we achieve the
massive transformation we require - because there will finally be the real incentive to invest in
the low carbon, clean economy of the future.

If we don't make this change, there will be no economic penalty for polluting - until it's too

And it will be our children and grandchildren who pay the price for our inaction.

It will be our prosperity that suffers if we let other nations take the front running in building
the low pollution economy of the future.


For Australia, this means we need to start our transformation now. Our economy is one of the most
carbon intensive in the world, so we need to adjust carefully to this new future.

Fortunately, in Australia, we have been preparing for this task for a long time.

For the ten years or so since Australia signed - but did not ratify - the Kyoto Protocol, the
Australian debate has been focused on how to design an emissions trading scheme to reduce
Australia's emissions and comply with our international obligations.

In 1999, the Australian Greenhouse Office, which was set up by the former government, released a
series of discussion papers on the design of an Australian emissions trading scheme.

In 2003, the former Government considered and rejected a cabinet submission proposing to develop an
Australian emissions trading scheme.

In 2006, a task force set up by the Australian states released a paper on setting out the design of
an Australian emissions trading scheme.

In 2007, the Howard Government's Prime Ministerial Task Group on Emissions Trading - a group of
leading business representatives and senior officials - recommended that the Government adopt a
Scheme similar to the one before the Senate this week.

And on the eve of the 2007 election, Mr Howard relented and accepted his Task Group's advice.

Since the 2007 election, the Rudd Government has been working non-stop to deliver this reform.

To get to the point where we now have laws before Parliament that will turn our high-polluting
economy of today into the low polluting economy of the future has taken well over a decade of
analysis, modelling and debate.

The result of a decade's work is a plan that will make deep cuts in Australia's carbon pollution,
while continuing to grow our economy.

Taking action on climate change through the Carbon Pollution Reduction Scheme is a positive
economic reform. Vested interests may try to argue otherwise, but the Government has undertaken
extensive consultation and modelling to ensure Australia's emissions trading scheme delivers
positive outcomes for our economy.

Under the Carbon Pollution Reduction Scheme, Treasury modelling shows that real wages increase.
Jobs continue to increase. Output increases. GNP increases. And GDP increases.

The Treasury modelling also suggests that economies that act early reduce their long-term costs. In
contrast, economies that defer emission pricing become relatively more emission-intensive, so that
when a global emission price is eventually introduced they face even higher costs.

So it is not surprising that the major economies of the world are moving now to position themselves
for a competitive advantage.

It is disingenuous to pretend Australia is going it alone on climate change or 'acting ahead of the
world', as some quarters claim.

The world may be moving at different speeds, but the world is moving in the same direction as the
Rudd Government - and last month's G8 declaration made this clear.

Some countries are ahead of us, some are behind. Many are gaining on us.

The European Union has had emissions trading since 2005. New Zealand has legislated its emissions
trading system. The US is working quickly to develop emissions trading, with a bill already through
its House of Representatives since the election of President Obama.

And many countries are working towards emissions trading - Japan, South Korea and Canada, to name a

People who look to the future understand that this is the new economic race: to develop the low
pollution goods and services that will enable the world's economies to grow while maintaining our

It's not a race we can win from the grandstand. We can't win from the commentary booth.

Australians are not a people who sit back and wait for change to wash over us. We take control of
our destiny. We innovate and find ways to make sure we are at the cutting edge of each new wave of
economic reform.

We did not sit back and wait for the full force of the global recession to hit us. We took early
and decisive action and while we are not out of the woods, the results of the Government's action
to stimulate the Australian economy are clear.

Climate change is no different.

We must give ourselves the best chance, which means starting our transition now and doing what is
right for Australia's national interest.


Each generation of politicians face challenges that define and shape the nation.

For today's politicians, it is difficult to name an issue that defines our legacy more than climate

For better or worse, the legacy of today's political leaders will be shaped by what we are prepared
to do on climate change for the benefit of future generations.

For Australia, action to reduce our carbon pollution is no longer a hypothetical concept off in the

Action is within our grasp. Action can happen in three days time. All that is required is political
will and leadership.

That political will and that leadership have been provided by the Rudd Government, while others
have sought refuge in smokescreens, slogans and fear.

Now, of course, climate change is no longer just a test of Malcolm Turnbull's leadership.

It is also a test of the Liberal Party's loyalty to its leader.

Indeed, Mr Turnbull's political career is inextricably linked to emissions trading.

His party knew that when they elected him leader. Yet so far, he has not been able to get his party
over the line - not with a single amendment.

The Leader of the Opposition might want to show leadership on climate change, but to do this, he
must first show leadership within his own party and prevail over the sceptics.

If Mr Turnbull can get his party on board with serious, credible amendments, that are in the
national interest, the Government will consider them.

He has yet to do so. Instead, a few weeks ago, he released a set of nine vague demands that are
irrelevant, irresponsible, or un-implementable.

For example, three of the demands go to ensuring that Australia's Carbon Pollution Reduction Scheme
is as generous to Australia's trade exposed industries as the United States scheme is to theirs.
But Australia's scheme is already more generous to our trade exposed industries than the United
States scheme.

Just a few short weeks since Mr Turnbull announced that the Liberal Party would be insisting on
their so-called principles, it appears that they have already been abandoned.

Having previously argued for a carbon copy of the US legislation, Mr Turnbull is today arguing for
us to copy the failed Canadian experiment of baseline and credit. This is more than a little
bizarre, since the Canadians have indicated that they are moving towards cap and trade.

Most bizarrely, he has proposed it be applied to only one sector of the economy.

Rehashing the failed Canadian experiment puts at risk Australia's ability to meet its national

It is not a hybrid, it is a mongrel. It is not a credible alternative, it is a smokescreen.

The electricity sector - one third of the economy's emissions, and half of the emissions included
in the CPRS - would get special treatment.

This approach would impose costs on other industries or ask taxpayers to fork out. You can either
have higher costs on other industries, or you fail to meet your commitments.

The resulting lack of certainty for one major sector means lack of certainty for the whole economy.

The idea that we can increase our unconditional targets with a smaller contribution from
generators, and provide 100 per cent assistance to all emissions intensive trade exposed industries
and coal has the distinct taste of magic pudding.

On top of that, embracing the failed Canadian experiment would reduce revenue that would otherwise
go to compensating low and middle income households, and to assisting all businesses prepare for
the low emissions economy of the future - such as through the Climate Change Action Fund.

The Opposition's approach would move Australia out of the mainstream - again. Just as the world is
coming to a consensus that cap and trade emissions trading is the way to go, the Opposition would
have us go in a completely different direction.

It's not surprising that it has no backing from industry or other stakeholders. Brad Page, of the
Energy Supply Association of Australia, said this would be "enormously administratively complex".

There has been no support from the Business Council of Australia, either. Their spokesman told the
Australian that:

"The BCA is concerned that a baseline and credit model will bring additional uncertainty over time
as such an approach may require changes to the baselines to achieve emissions targets and the
quantum and timing of such changes is unknown."

The Government's scheme comes at the end of a ten year consultation process. Mr Turnbull's latest
offering is more about buying time and sorting out the internal politics of the Liberal Party than
making a legitimate contribution to the climate change debate.

And the fact that on Saturday, Barnaby Joyce said he might support this approach (though he now
seems to be recanting) shows that it is not going to do anything to tackle climate change - but it
might calm the farm in the Coalition.

Having said that, it is worth noting that this is not even endorsed Coalition policy. Mr Turnbull
told his press conference today:

No, it is not Coalition policy. We will formulate our amendments, what we want to do is negotiate
with the Government.

This is hardly the language of an alternative prime minister.

I simply say this: a party that seeks to govern must be able to set their internal political
squabbles aside and make a decision in favour of the national interest.

Australian policy makers have been working for many years to design an emissions trading scheme
tailored to Australia's national interest - a Scheme that recognises the nature, shape and
strengths of our economy.


The one area where the Liberal Party has been consistent - through years in government and
opposition - has been in their efforts to divert and delay.

Their most consistent mantra has been: we should wait until after Copenhagen; we should see what
the rest of the world is doing; we shouldn't be rushing ahead of the world.

But the reality is that these excuses have nothing to do with taking stock of Copenhagen. They have
nothing to do with looking at what the rest of the world is doing. It is all about avoiding the
tough decisions.

President Obama recently remarked on the progress of health care reform in Washington by saying:

"If you do not set deadlines in this town, things do not happen. The default position is inertia,
because doing something always creates some people who are unhappy."

The same could be said for the climate change debate in Australia.

After 12 years of inertia on climate change under the Howard Government, the Liberal Party does not
need more time - they need stronger leadership.

In the absence of leadership, we need deadlines in this town too. The clock is now counting down to
a deadline on climate change.


And if the Liberals fail to deliver, the Rudd Government is not going to give this up.

We will press on with this reform for as long as we have to.

The Australian people have made it clear they want action on climate change.

The Liberal Party can do this the easy way, or the hard way.

One way or the other, we are going to get this through.

Anything else shows an arrogant disregard for the demands of Australians today and the inheritance
of Australians tomorrow.


JOURNALIST: John Breusch from the Financial Review, you spoke of the administrative complexity of
the baseline and credit model; Frontier Economics' Danny Price makes the point that your scheme in
effect already includes baseline credits through the way it delivers emissions intensive trade
exposed assistance. You've set a baseline for lots of industries, and he's saying it's going to add
just one more industry which is the power generation sector. Is he right?

WONG: First can I say I'm not aware Mr Price is the leader of the Opposition, and that this is
actually a position that will be put as an amendment to the Senate. I think, I want to make that
point because it seems to the Government, and I think I would suggest to a number of people in this
country, it is an odd thing three days out from a vote on a piece of legislation this significant,
that has been the subject of so much consultation, discussion and political debate, that the
Liberal Party would release a report for discussion. We have had a lot of discussion but we have
not had a position on it. Our approach has been the subject of a lot of discussion and
consultation. We do have an activity basis for the provision of assistance in the emissions
intensive trade exposed sector, but it is not a baseline and credits scheme. It is the way in which
we are calculating the provision of free permits in a way that gives industry certainty into the
future so people are clear about what their entitlement will be into the future. So can I say again
it seems to me, not withstanding that this is the Opposition's position from what I can gather, to
have a situation where you have one type of scheme within another scheme is simply to add
complexity, additional complexity into what is already a complex reform and one that is being
discussed, considered and thought through. The final point I make is, from what I can discern from
the press conference and the report, one of the key flaws in this approach is the issue of
certainty both for the sectors within that and sectors outside of the baseline and credit sector
that they are proposing. The key issue here is you have to give certainty to industry to make the
investments, to make the changes to the economy that we know we require. Finally it doesn't seem to
us, and to most commentators who look at this carefully how does this stack up? How do you remove
essentially one very large part of your economy from your cap and trade scheme but still achieve
the same sorts of targets. Really you either expose taxpayers to more risk or you expose other
sectors of the economy to higher costs, or you don't meet your targets, it simply doesn't stack up.

JOURNALIST: Senator Wong, Deb Nesbitt from Thompson Reuters. Senator I have asked you about this
before, the Renewable Energy Target Bill and the CPRS Bill have been linked and therefore are both
stalled in the Senate, I can't see any legal reason for the two bills to be tied together but it
means that billion dollars of investment to renewable energy have been held up, solar PV industry
is very upset because they have been in literally, held in limbo. That whole renewable energy
basically been held hostage to politicking around more compensation for big polluters, for coal for
instance, so could I put it to you that this week you could fulfil an election mandate you have on
renewable energy - 20 per cent by 2020 - by de-linking those bills yourself and letting that bill
go through the Senate with the support of the Coalition and the Greens, alternatively if the
Coalition and the Greens do put up an amendment to do that, would you consider that a serious and
credible amendment and support it?

WONG: Can I say first there are a couple of factual errors in your question so I am going to go
through them. The first is you say it is stalled in the Senate because it's linked, it's stalled in
the Senate because Senator Fielding and the Opposition deferred a vote on the renewable energy
legislation, lets be clear about that. Second there is a lot of posturing in this town going on
about renewable energy, from the Opposition and I think it's important for us to remember a couple
of things. In government renewable energy went backwards under them. Went backwards. So now I know
a couple of shadow ministers want to be the new found allies and friends and champions of the
renewable energy sector. Talk is cheap, action is what counts, and when they were in government
renewable energy went backwards. Third, it is our election commitment they never made this election
commitment, so people who suggest that they have a higher level of commitment to the renewable
energy sector when they have a history of not listening to advice and ensuring the sector goes
backwards when in government and putting forward far less ambitious election commitments to the
Australian people on election, I think should perhaps be a little more honest in this debate.
Finally, fourthly, I have always said and I think in response to questions from you, that we will
consider serious amendments but I have also said this, that we need both. Australia needs both. Can
I remind you what we released yesterday the Tracking to Kyoto revised projections that showed us as
I referred to in the speech going to 120 per cent of our 2000 levels of emissions by 2020, that's
with the renewable energy target. So even with renewable energy legislation, which we need, because
we should bring forward investment in the renewable sector, Australia's emissions will continue to
rise without the Carbon Pollution Reduction Scheme. What is happening is that there are those in
the Opposition who want to divert attention from the fact that they do not have a position on the
Carbon Pollution Reduction Scheme, and have a discussion about renewable energy without putting
forward a single amendment, without putting forward a single amendment, want to divert the
discussion to avoid I think people noticing, although that might be a little difficult, people
noticing the fact that they are completely divided and in disarray on the Carbon Pollution
Reduction Scheme.

JOURNALIST: Simon Grose from Science Media; you said in your speech that we need to fundamentally
change the way the economy works, that reminded me of the message that Senator Christine Milne of
the Greens gave here about two or three months ago, she talked about, I think a new world, she of
course has a very ambitious perhaps outlandish goal of 40 per cent reductions in our emissions by
2020, your best case is 25 per cent, if Copenhagen is a resounding success, I am going to ask you a
question that she dodged. I asked her, that if to achieve that 40 per cent reduction, which and how
many Australian coal fire power stations would have to close by 2020, so to you to achieve a 25 per
cent reduction in our emissions by 2020, assuming that Copenhagen a resounding success, which and
how many Australian coal fired power stations would have to close?

WONG: There is no doubt that meeting the sorts of targets Australia needs we will need to I think I
have described it as re-tool, re-engineer our own energy sector, and that will need a range of
changes. One of them will be an increase in renewable energy, another over time will be a reduction
in emissions from coal which is one of the reasons the Government is investing so much into carbon
capture and storage. That's necessary not just for Australia but for the world. And the other is
for example gas will obviously be as it has been in other economies one of the transitional fuels.
What we want is a market mechanism that gives the incentive and the certainty for the sector to
adjust. And I strongly believe this is one of those situations where government should set the
framework, government should set the scheme that imposes a carbon price, you get the right
framework in place and that will drive the transition, rather then governments picking and choosing
particular sectors that need action. And that is the logic of the scheme such as the one we are
putting forward. We have as you know put forward assistance to the electricity sector recognising
the sorts of transition which is required and we do think that the best way forward here is to put
in place a scheme that enables that certainty in that investment in order to achieve that

JOURNALIST: David Denham from Preview Magazine Senator: one significant factor which you haven't
talked about today and that is population, and according to the latest ABS release Australia's
population is now rising at 1.9 per cent per year, and what that means is that we are going to have
30 million people in the county by 2025, and the consequence of that if you go back to the per
capita emissions in Australia in 1990 from fossil fuels, and if you go back to that level, and go
up to that population in 2025, we are going to be 40 per cent more, we are going to produce 40 per
cent more emissions from fossil fuels in 2025 than we are producing now. So the question is why in
your strategy was population not included because it's clearly very significant in terms of carbon
emission targets?

WONG: Well first you suggest in your question that we retain the capita emissions as at 1990. One
of the whole points of this policy is to reduce emissions and in fact a 25 per cent reduction by
2020 would imply I think around a 48 per cent per capita reduction between the period 1990 and
2020. My view about this and the Government's view has been that really when you are one of the
world's highest per capita emitters, there is a lot you can do about reducing your emissions rather
than simply looking at the population issue, which has a whole range of other economic as well as
social consequences. Australia can reduce its emissions and grow its economy, the Treasury
Modelling demonstrates that. We do need to reduce our per capita emissions because we are a very
high per capita emitter and that's what the legislation before the Senate will achieve.

JOURNALIST: Senator Brad Hodson from Channel 10, the headlines this morning from the Frontier
report were based around savings to households; this research showed there could be credible
savings to households with the introduction of the CPRS. In the next 3 days will you sit down with
the Opposition to discuss whether that's possible, and if not what do you say to households now
there is some research out there to make it hurt less at the beginning of the scheme?

WONG: The first thing I'd say is we have been completely upfront as a Government about the impact
of the scheme and we have put in place a very substantial plan for assistance for households. You
might recall that at the Prime Minister's announcement in this place of the White Paper the
household compensation package, the household assistance package was made public. In fact,
households are the largest recipients in terms of the total revenue from the scheme and we made
clear there that our focus would be particularly on low income households but also on middle income
households. We've set out a very clear set of assistance to Australian households for the scheme. I
go back to what I said in my speech; it doesn't stack up and the reality is that tackling climate
change, there's no easy way, and anybody who says there's an easy way to do this is having people
on. We've confronted the difficult policy tasks, we've put forward a set of responsible measured
reforms, assistance for Australian households recognising the increased electricity costs, we've
never hidden that; and we've put in place very substantial assistance measures to reflect that.
What we have now is another report 3 days out from the vote, which is not even Coalition policy -
so I think the contrast is clear.

JOURNALIST: Next question is from Cathy Alexander: Senator Cathy Alexander from AAP.

WONG: Sorry I should just say one thing, Brad asked me would I sit down and negotiate. I think I've
said it must be close to a hundred times by now but certainly in the tens of times; if Mr Turnbull
has serious credible amendments with the support of his party room we're happy to have a
discussion. He hasn't put any forward.

JOURNALIST: Cathy Alexander from AAP, Minister it is D-day for the ETS in the Senate this week, the
Government put a lot of work into this scheme and has spend a lot of time selling it, explaining it
to the public, but it looks like it will get voted down. None of the Opposition Senators support
it, they've indicated they will vote it down. If that happens, what is your plan? Will you change
tack, will you put it up again in November or perhaps wait until after Copenhagen and will you be
prepared to perhaps talk to the Opposition about some of the elements about what they've put out
there today?

WONG: Well again, happy to talk to the Opposition if they have a position. We've put forward a plan
that is credible, responsible, well considered and the subject of a lot of consultation and
detailed work. And that's what will be the subject of the vote in the Senate on Thursday, and our
focus will be on arguing the case for that legislation because we think it's the right thing to do.

JOURNALIST: Peter Williams: Peter Williams from the West Australian, Senator you've brought up the
magic pudding again today, rather than addressing the Opposition the Frontier Economics report
suggests today the magic pudding is in reducing the churn factor in the scheme, in other words
having so much money churning around in the system, that's where they say the savings can be made.
Are they wrong?

WONG: Well, a baseline and credit scheme also has churn in it and what you're going to get is churn
from one sector of electricity generation to the other. So again as I've said anybody that says
there's an easy, simple way to reform the economy I think is having you on. I just go back to this
issue; we've been doing this for Australia, as a nation, has been engaged in this for over a
decade. We went to the election with a commitment; Malcolm Turnbull went to the election not with a
hybrid scheme commitment but with a cap and trade scheme commitment. We've build on the work of the
task group Prime Minister Howard put in place. We put out a Green Paper a year ago, we've put out
Treasury modelling, the largest economic modelling exercise in the nation's history in October, we
put out a White Paper in December and made some further detail and some further changes in May. All
of those steps have been the subject of consultation and discussion with industry, with business,
as well as with community and with environment groups. So we believe we've put the detailed hard
policy work that's necessary into developing this legislation. I don't think 3 days before a vote
in the Senate, coming up with a model which is different to what is being suggested historically or
elsewhere in the world is a sensible way to go.

JOURNALIST: Sophie Morris from the Australian Financial Review. You've spoken Minister about the
need for incentives and certainty yet the Government's model provides neither of these for farmers.
The Government has said it will defer a decision until 2013 as to whether agriculture is included
in the emissions trading scheme from 2015.Given that other countries have already excluded
agriculture, notably the US and I believe also Europe, why not provide that certainty to farmers
now or do you hold up hope that it might be possible given they account for 16% of Australia's
total emissions - are you predisposed to think agriculture should be included and it's just a
matter of finding our how?

WONG: This is an interesting debate this one about agriculture because I keep having to stop myself
and remind myself because it's not in the Bill before the Senate. It's not included and we've made
clear our view about that. In terms of incentives one of the things we are doing, as you may
recall, is commencing the voluntary opt-in for forestry earlier than the commencement of the rest
of the scheme to give land owners or land holders an incentive if they want to establish forests
and therefore to generate permits which is a potential income stream for them. We think there is a
lot more work that would need to be done in terms of how you might deal with the agricultural
sector, as you've said 16% of Australia's emissions. Through Tony Burke's portfolio we're funding a
range of research into soil carbon initiatives and the like. I just would remind us all though that
we also have to remember we are now a Kyoto party; we've signed up to an international target. We
need to make sure that how we deal with these issues is consistent with the international framework
which, as yet, doesn't recognise some of the things that have been spoken about. Now I think down
the track what should occur through these international negotiations is improvement in these
international carbon accounting rules, but there is still a lot of work to be done on these issues.

JOURNALIST: Minister can I ask you your views or theories about how the sceptics or deniers have
been able to get so much traction in the past year or so against what seems to any rational
judgment an overwhelming body of scientific opinion for years. I find it very difficult to
attribute it all to a couple of lightweights like Steve Fielding and Ian Plimer.

WONG: I'm really not going to comment on that but I'll comment on the issue. I suppose generally
this debate is often characterised by the extreme ends of the debate and I think that is one of the
reasons why this is politically challenging, and it has been I think a challenging debate not just
for those in it, but also those observing it, to work out where does the truth actually lie on a
range of issues. I think when there is a problem there are a range of responses to it and one of
them, which we all know about, is that you can deny that the problem is there. I think that the
evidence is pretty clear, the fourth assessment of the Intergovernmental Panel on Climate Change
points out a number of things. One of them is that the warming we've seen since the 1950s is double
that of the century; that is the annual warming. That the changes in terms of warming of the
climate system can't be explained unless you factor in human activity and human impact on the
climate, and a shorter timeframe, 13 of the 14 hottest years in history have occurred since 1995. I
don't think it's responsible for governments to sit there and ignore the overwhelming weight of the
consensus science on this issue, in part first because I think second guessing scientists is not
always a good thing for politicians to do, in part also if you think of it as a risk management
perspective are we really saying that we now think that all the scientists are wrong and therefore
those that come after us should bear all of the risk or most of the risk because that's essentially
what we're doing. I think Australians have moved passed that, obviously there are going to always
be some who deny the need for action, but I have to say from my perspective, others may have a
different view. When I go to schools, when I go to different community groups, and even speaking to
many Australian business people, which obviously has been a very important part of my job, I very
rarely hear anybody saying we shouldn't do anything.

JOURNALIST: Minister Andrew Robb reiterated today his claim that once you get out beyond the
forward estimates in the Budget the CPRS starts raising billions of dollars in money that is not
allocated to anyone. Is he right, and if he is not right where are we going to raise the money to
provide financial assistance to developing countries to cut their emissions?

WONG: The issue of financing is a broader one than simply looking at public financing. What we're
trying to develop through the international negotiations is a new financing structure. What we will
need is over the years to come, and this is a longer term issue, a framework that enables financing
to flow, and our view in Australia has been very much that it's important, what we need to do is
leverage private sector funding, we need to leverage private sector investment. Obviously this will
be an issue that will continue to be discussed both through the international negotiations and also
I think through the G20, that is an issue on the agenda. But can I make this point, there's a lot
of discussion about needing more compensation here there or everywhere. And I think it's important
that the alternative government, if they're putting forward a position that says we want to give
more assistance, in a context where the Budget papers make very clear what the situation is over
the forward estimates period in relation to CPRS revenue, that if they are serious about being
economically responsible that they're going to have to identify where that money comes from. What
we have at the moment is a debate where intermittently, I don't know if it's their position today
but intermittently we have different shadow Ministers saying different things about how much
additional assistance should be provided. Without providing any indication, of any detail about
where that funding is coming from and I think if you're serious about your economic credibility,
that's inevitably a question that people will want to know. Is it coming from households, is it
coming from other parts of the economy, and if not how are you going to fund it?

JOURNALIST: Senator Wong I'm just wondering if you could update us on your view of what the likely
outcome of the international negotiations, the meeting in Copenhagen in December, might be. It's
been put to me by a number of people, looking internationally, that the likely outcome is that
there will be a skeleton agreement I guess with some commitments from Australia, the US, Europe and
perhaps possibly China, but that the meeting won't close, that it will remain open for another year
as we sort out the detail of that, so there's some optimism of at least a strong outline of a basic
agreement. Is that your view?

WONG: I think there's a lot more that needs to be done before I can come to a firm opinion on that
and a firm view because this is still moving, it's still underway and negotiations are still
occurring. Not just through the UN framework but obviously the Major Economies Forum that President
Obama established as well as the UN Secretary General meeting which I think is in September. So
there's obviously a lot of international focus on this issue and I think the shape of what will
emerge in Copenhagen is still to be developed. What I've said is I think we will get an agreement,
it's a question where the level of ambition is and that's still something that is in our
collective, meaning the nations of the world, collective hands. I do have a very strong view that
Copenhagen is a historic opportunity that we can't miss, and there are certain times in history
where I think the expectation is for movement, for a milestone, and Copenhagen is one of those
times. So our view very strongly, which I think is shared by many nations, we've seen Prime
Minister Brown I think make very strong statements about this, is that we do need to continue to do
all we can to get a good outcome at Copenhagen. And I think globally we will be judged harshly if
we can't achieve a substantial step forward. As I've said in my speech the chance to stop climate
change occurring at all has been lost; we no longer have that option. What we do have is the
opportunity still to reduce it, to reduce the risk not just for ourselves but more importantly for
our children and our grandchildren and I don't believe we should lose that opportunity.

JOURNALIST: Simon Grose, Science Media, you said in your speech that introducing the CPRS will
begin to close the door on climate change. All being well it may make a little bit of a reduction
in our emissions which are one or so percent of the world's, at the same time Australia is doing
all it can to increase the emissions from the rest of the world ABARE predicts we'll be exporting
130 million tonnes of coal, thermal coal, next year, which is a 6.6% increase on the current year,
about twice as much as we burn domestically. A lot of these exports are being facilitated by
finding from your Government through Minister Albanese and others to get higher capacity to get
higher capacity from our coal export terminals. How do you reconcile these two arms of government?

WONG: Well what lies behind your question is really an assertion that to tackle climate change the
world has to stop using coal full stop. I thin I've made this point to you, whatever we do, coal
will continue to be a large part of the energy mix for the globe. If you look at international
energy agency predictions out to 2050 about the energy mix for the globe, coal in fact continues to
grow as a significant part of that energy mix. So Australia doesn't help the global challenge of
climate change if we simply decide we're not going to export coal; the world will still use coal.
So the question is how do we deal with that, and the best way to deal with that is to try and find
the technology the world needs to reflect the use of coal and the challenge of climate change. We
have to find low emissions technology for coal, we have to make carbon capture and storage work,
these are one of the key and must-have technologies in the challenge that we face. Of course we
need others, we need to deploy more renewable energy, I don't think anybody disagrees with that and
that's why we have policies in place to drive that investment. But the world, if you are serious
about tackling climate change, the world also needs an answer on coal and that's why the Government
has put so much funding and focus, very significant focus of the Prime Minister's work
internationally on the work in carbon capture and storage.

JOURNALIST: Thank you Minister I am going to change the subject a little bit here from population.
The current science indicates we are going to have a 1 metre sea level rise by the end of this
century most likely or not, and that would displace something like 100, or effect something like
100 million people, Bangladesh as you said in your speech, the Mekong Delta and so on as well as
the Pacific Islands, so the first part of my question is has the Government got any plans for
dealing with these people, are we going to be taking any refugees or is that just too far ahead to
consider, and the second one is back to population I suppose really, the...

WONG: The first question was sort of a population question as well wasn't it?

JOURNALIST: Well not really, we are not going to increase the population with that when there is
going to be an increase or not, in your role of water, water resources its clear that these
latitudes are going to decrease in winter rains from now on until the far as we can see because of
global warming, so therefore there must be some sort of, you wonder 100 million people, 50 million
people, what, do you have an optimum figure or what is your thinking on this, you must have
something on this so what is it?

WONG: Well first you asked what can we do in terms of the impact of climate change and what we say
is well we can pass the scheme on Thursday. Because that would mean Australia would actually start
to reduce its emissions as opposed to continuing to contribute to climate change, that's the,
that's actually what we are talking about. The vote on Thursday is a decision either to allow
Australia's emissions to continue to rise, to allow Australia's contribution to climate change to
continue to worsen and grow, or we turn it around - that's the decision. The second point is yes
there are enormous challenges facing nations around the globe as a result of climate change, that's
why we have to act. We have to act to reduce the risk, we have to act to mitigate and I think we
got a very clear articulation last week at the Pacific Islands Forum where we saw a range of our
Pacific island neighbours put their views very strongly about why we needed to act. They also put
their views very strongly on a couple of fronts, first that the priorities of different nations
differ in terms of what are their adaptation priorities. Not everybody is, for some people it is
internal migration, for others it is assistance in terms of crop diversification or other
agricultural techniques, for others still it is how do you secure fresh water supplies in the
context where you are seeing seawater intrusion, so there are a diverse range of priorities. I
released a paper, or the Prime Minister released a paper that we had worked up with as a result of
our election commitment, to engage with the Pacific island nations on these issues. And one of the
points we made is that it is very important that Australia works with these nations in a way that
enables them to identify their own priorities. And even for Kiribati, and you may or may not have
seen the press conference, the representative from Kiribati said but we are not asking to be
refugees, made that very clear, what she is talking about, her nation is talking about is
assistance with skills development if and skills based migration down the track if that were
required. In the near term there will be other more pressing adaptation challenges. I think on the
issue of water what I will say is this, if you want an example of why we have to act on climate
change really you should look at what is happening in the southern catchments of the Murray Darling
Basin where in many or most Australia is already tracking at what the CSIRO tells us is the worse
case climate change scenarios for 2030. So if you ever want an example at home about why it is we
need to act, have a look at the sort last three years of rainfall in the Southern Murray Darling
Basin. Thank you very much.