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Transcript of interview with Peter Van Onselen and Paul Kelly: Sky News, AM Agenda: 27 October 2013: Emissions Trading Scheme; Direct Action

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TOPICS: Emissions trading scheme; Direct Action

PETER VAN ONSELEN: We're joined now by the Shadow Minister for Climate Change, Mark Butler, out of Adelaide. Welcome to the program.

MARK BUTLER: Morning Peter and Paul.

VAN ONSELEN: I just wanted to get straight into your portfolio area and start I guess by discussing this repeal of the carbon tax that is obviously on the agenda with the election of the Coalition Government. Now, just in very simple terms, what's the plan from the Opposition? Are you going to get out of the way and let them repeal the carbon tax or are you going to look to stymie that repeal. And I'm not talking about anything to do with Direct Action versus the ETS. I'm talking about that first bit of legislation purely on repealing the carbon tax.

BUTLER: Well, the short answer to that, Peter, is we haven't yet made a final decision about a detailed response to eight pieces of legislation, as Bill Shorten and Tanya Plibersek have said. There will be a proper discussion, particularly at Shadow Cabinet but also at Caucus about that, but that discussion will be informed by a number of things. The first is that Labor has an unshakeable commitment to taking strong and sensible action on climate change. This is a commitment we've had in our platform for a very long time, since even before the Australian Greens Party existed as a political party. It also will be informed by the fact that we took to the last election a commitment ourselves to terminate the carbon tax and move to an emissions trading scheme, a scheme you see all throughout the world as different countries, different states and provinces within countries start to take real action against climate change, and it will also be informed about a serious analysis about

not the - not just what Tony Abbott is seeking to tear down with the bills he's bringing into parliament in a couple of weeks but also what he's seeking to put in its place, and the most glaring deficiency in what Tony Abbott is seeking to put in place is that it lacks a legal limit on carbon pollution, a cap on carbon pollution, which is the central element of any serious action against climate change.

VAN ONSELEN: So I guess the follow-up question then is are there - even though you went to the election pledging yourselves, as you mentioned, to terminate the carbon tax, is there the potential that you won't terminate it under the terms by which Tony Abbott wants to do so?

BUTLER: Well, as I said, we haven't taken a final decision about this legislation but I've tried to set out some bedrock principles that I think will guide the discussion in Shadow Cabinet and in Caucus. These are principles that Bill Shorten, Tanya Plibersek have also enunciated as have others. We won't be shaken from our commitment to climate change, to taking action on climate change. There is a longstanding commitment and we also are very keen to see there be a legal limit on carbon pollution. At the moment what you see from Tony Abbott's policy is that he would relegate the target that we have in place to reduce our carbon pollution as a nation. He'd relegate that to a mere aspiration rather than a firm legal limit on carbon pollution. That we think there is a major deficiency, perhaps the fundamental deficiency in the Direct Action policy.

PAUL KELLY: Just looking at Labor principles, Mark Butler, I think it's safe to assume, is it, that Labor will remain committed to the principle of an emissions trading scheme and carbon pricing.

BUTLER: Well, the central commitment we have is to a cap on carbon pollution, a cap that reduces over time of the type you're seeing around the world. We still think that the best mechanism to achieve that cap is an emissions trading scheme. It puts in place a cap and then allows business to work out the cheapest and most effective way to operate within that system. You see it in many places in Europe and in North America but increasingly we're seeing it in our own region. China is starting up seven pilot emission trading schemes this year with the ambition of having a national emissions trading scheme in place by the end of this decade, our largest trading partner. Korea, our third largest export market starts an emissions trading scheme the year after next. Parts of Japan, our second largest export market are putting in place an emissions trading scheme. This is a true market-based mechanism that makes sure that we can achieve the environmental outcomes of reducing carbon pollution at the least cost to our business.

KELLY: Well, to what extent is it Labor strategy to try and bring these two debates together? And that is tieing the debate about Tony Abbott's Direct Action policy into his proposal to repeal carbon pricing?

BUTLER: Well, as I said, we haven't yet made those decisions, haven't yet had those discussions at shadow cabinet and Caucus but it's important in this debate, this community debate as much as parliamentary debate, that we be clear about the

ends that we're seeking to achieve which is a reduction in carbon pollution and the means by which we think we can best achieve that, compared to the means by which Tony Abbott would try to achieve it through Direct Action. So they are two connected debates but we want to be very clear about having a debate about the objective of carbon pollution reduction which we think the Liberal Party is leaving on the side by not having a legal limit on carbon pollution, but also then having a discussion about the means by which Tony Abbott would try to get to that aspiration that he still ascribes to in some - to some degree at least.

VAN ONSELEN: It sounds like from your perspective, unless they link repealing the carbon tax to setting a legal requirement to hit the 2020 target, there's a very good chance - I know you haven't decided it yet - but there is a very good chance that Labor will therefore block the repeal of the carbon tax.

BUTLER: Well, this has got a little way to go yet, not only in our internal discussions, a debate within the House of Representatives. The bill, if it passes, which you'd have to think on the numbers it will in the House of Reps, will then go to the Senate and it may well be there's a committee process that hasn't yet been discussed, but there may well be a committee process to consider those bills and start to flesh out this connection between the lack of a limit on carbon pollution, which seems to be a commitment they have to remove that limit, and the question of emissions trading versus the sort of carbon slush fund - really can't describe it as anything but that - a carbon slush fund that Greg Hunt would put in place to pay

polluters to make changes I suspect they were intending to make anyway.

KELLY: Okay, from what you've just said it seems as though what Labor would like to see is a reference of the legislation to a Senate committee with the brief of the Senate Committee to look at the whole box and dice. Is that essentially where you're coming from?

BUTLER: No look, we haven't made that decision either. But this is a very important piece of legislation. It's up to the Senate to decide whether it wants a committee process to inquire into the impact that this legislation will have on our environment. But just as importantly on our business community, on industry that have been working up to an emissions trading scheme which many business identities have said is the most effective way to deal with climate change. This is a very important piece of legislation which the Senate may want to refer to a committee. As I said, if they do do that then obviously that will be a chance to flesh out, as a community debate as much as a parliamentary debate, some of these issues about carbon pollution reduction as a legal limit, but also these different ways of getting to that point.

KELLY: To what extent do you think we might see a further change in the politics of the climate change debate over the course of the coming parliament? I mean, essentially what happened was that Tony Abbott did tend to control the politics of this in much of the last parliament. Do you think it's possible that the politics will change again as people begin to focus on Abbott's Direct Action scheme and we might see a move back in favour of Labor in terms of electoral sentiment?

BUTLER: Well, there are two problems that Tony Abbott has I think. Firstly he's walking away from a serious commitment to reducing carbon pollution. He doesn't want to put a legal limit in the legislation and I think that first and foremost counts against his policy. But also Direct Action has been in the marketplace for now more than three years and in that time Greg Hunt has been utterly unable to come up with any credible climate scientist or economist to stand up and say they support this as a credible way to achieve reduction in carbon pollution. Indeed during the election campaign Greg Hunt verballed a couple of Nobel laureates as being supporters of Direct Action and when the radio station on which he'd said that followed up those Nobel laureates they both said they'd never spoken to Greg Hunt about this issue, never heard of the Direct Action policy. So I think as time goes on, as we're able to explore the green paper and then the white paper the Government's going to put out around Direct Action, we'll see that frankly it's a bit of a fantasy in terms of the objectives that it seeks to have around reducing carbon pollution.

VAN ONSELEN: I didn't know that about the Nobel laureates, perhaps someone should put that on Greg Hunt's Wikipedia site. But I wanted to ask you about Direct Action and the report in 'The Australian' during the week that we saw, Mark Butler, that Greg Hunt was considering or looking at linking his Direct Action policy into supply bills as a way of ensuring that he could get it through the parliament. Firstly, what do you think of that, but secondly, does that open the possibility that we might see Labor blocking supply?

BUTLER: Well, we'll wait and see what Greg Hunt wants to do. I've heard a range of different ways in which Greg Hunt has said he wants to do this, by regulation, by a supply bill, or God forbid, by a usual piece of legislation. So we're not quite sure what tactic he's going to try to get this legislation through the parliament. But part of the problem with deciding what our response would be is we still don't understand quite what Direct Action is. I don't think anyone in the community could say they do understand it. The terms of reference for the emissions reduction fund, which is, as Greg Hunt describes it, the centrepiece of Direct Action is incredibly vague. People I've spoken to still don't have any specific understanding about the way in which this fund would work, so quite what the legislation would look like, who knows?

VAN ONSELEN: Let me interrupt there. Isn't it very simple though, Direct Action is just quite simply directly giving money to companies or businesses that are able to show that they are taking action that will reduce their emissions?

BUTLER: Well that's the - that's the idea. The problem is that we don't know what criteria will be around this. For example, are we only going to pay for things that people weren't going to be doing anyway? The question of additionality. I mean, are we going to be paying polluters for making changes that they'd already intended to make? Are these things going to be permanent reductions in carbon pollution? Are they going to be measurable? Greg Hunt's tried to compare this to a reverse auction for example in the water market. Well, in the water market people present quite

specific entitlements to given quantities of water that are exchanged at the time of the reverse auction. It appears that this emissions reduction fund is going to be paying polluters for ideas about how they might reduce pollution in the future. Many of these ideas haven't been tested. It's been quite clearly demonstrated by the universities of Western Australia, by the CSIRO and by others that for example soil carbon, which is the centrepiece of Greg Hunt's idea, sequestering carbon back into the soil is not going to work, it's simply not going to work at the scale that Greg Hunt wants it to or at the price that Greg Hunt thinks he can get it for. So this is really buying a bit of a pig in the poke. We don't know how this is going to work, we've not seen clear criteria about the abatement that he will pay for, and so for that reason we can't possibly understand what the legislation is going to look like.

KELLY: Okay, just listening to that answer can I ask you, do you think there's a potential trap here for Tony Abbott in as much as he might find himself in a situation where eventually he repeals the carbon pricing legislation but he can't actually legislate his own Direct Action agenda and so therefore he's stuck in the middle without a policy?

BUTLER: Well, that may be the case. We'll take our own position about the Direct Action policy once it becomes a little bit clearer. We're very negative about it at the moment in terms of what we have seen. We'll take our position. But there are others in the Senate, particularly after the 1st of July, the Palmer United Party and others who have already indicated some scepticism about the Direct Action policy. So this is obviously a challenge for the Government but it's more something for them to comment on than me.

VAN ONSELEN: But wouldn't you be doing Tony Abbott a - wouldn't you be doing Tony Abbott a favour if you allowed him to get rid of the carbon tax, as he's so clearly pledged to do, but then if you blocked him on Direct Action then that just avoids him having to implement this $3.2 billion white elephant.

BUTLER: Well, it is a white elephant we think, but Tony Abbott is still left with a commitment that he's given and reiterated a number of times to reducing carbon pollution by 5 per cent by 2020. Also, he's going to be part of discussions at G20 and then in the United Nations framework over the next couple of years about an agreement that will replace Kyoto post-2020 as well. China is going to take to those discussions I think quite an ambitious position given the seismic shift we've seen in China's climate change policies over the course of this year. The US has a commitment to reducing their carbon pollution by 17 per cent. You're seeing a whole range of other nations that were standing aside, standing away from these negotiations some years ago, now coming to the table wanting an ambitious

agreement. So Tony Abbott isn't simply going to be able to just push climate change aside, push his international commitments aside and walk away from the negotiations that are going to start in force next year for a new agreement.

KELLY: Well, let me ask you, how do you feel about the prospect of a 2016 election in which Tony Abbott has got his Direct Action program up and running and you're running on your carbon pricing ETS policy against his Direct Action policy? Is that a

situation which the Labor Party would feel confident about? Would you be happy about that sort of political and policy fight?

BUTLER: Well, I think that's getting ahead of ourselves a little bit Paul, with respect.

KELLY: Sure, sure.

Butler: We're only some weeks from the 2013 election. We haven't yet resumed parliament. We're dealing with a response, particularly to the repeal bills that the Government has put out for exposure. And I think Bill Shorten has made it clear, we're far too far from the 2016 election to get into a discussion yet about what our policies will be. But suffice it to say I think that the community can be confident that we will take a policy that remains committed to taking strong and sensible action on climate change. Beyond that what the policy details will be, frankly it's far too early to say.

VAN ONSELEN: All right, well, Mark Butler, we'll get you back on the program when it's no longer too early to say and you can take us through it in a bit more detail. Thanks very much for joining us on Australian Agenda. Much appreciated.

BUTLER: Thank you gentlemen.


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