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Wednesday, 16 June 2010
Page: 5643

Mr COMBET (Minister for Defence Materiel and Science and Minister Assisting the Minister for Climate Change and Energy Efficiency) (12:57 PM) —As I indicated in my opening remarks, the challenge of climate change has not gone away and it continues to demand strong domestic and international action. The government remains committed to introducing the CPRS because that is the cheapest and most effective way of tackling climate change. For example, I was speaking to a forum of CEOs of international organisations last night, and one of those companies with interests in the energy industry made the observation that the fact that the CPRS legislation was opposed in the Senate by the opposition and by the Greens has led to greater investment uncertainty in the energy sector.

Everyone knows that a market based mechanism for pricing carbon is the most economically efficient way of going about reducing emissions. It is important that we price in the externality of carbon pollution, and a market based mechanism through an emissions trading scheme as represented by the government’s Carbon Pollution Reduction Scheme is the most effective way of tackling climate change. It was blocked in the Senate by the coalition. It is an important economic reform. It had been supported by the coalition, of course, but ultimately, with the replacement of the former leader, Malcolm Turnbull, the policy position on the other side changed and that has led to greater uncertainty. The government has to deal with that reality now—that there is no longer bipartisan support for the CPRS. This and slower than expected global action mean that the CPRS has inevitably been delayed. It does not mean, however, that the government is not committed to a market based mechanism for reducing emissions. Contingent upon developments in the international community and the important building of public support and bipartisan support, one would hope, for an important economic and environmental reform, the parliament will inevitably be returning to this issue.

In relation to renewable energy, the government have before the parliament at present a number of amendments to the renewable energy target legislation that we anticipate will be supported—they certainly should be supported—so that they can become law. The purpose of those amendments is to divide the renewable energy target, which is for 20 per cent of Australia’s electricity to be supplied from renewable sources by the year 2020, into two categories: a large-scale category and a small-scale category of renewable energy generation. This will give greater certainty to investors in the large-scale renewable energy sector—areas such as wind power, in particular, and geothermal but also other forms of renewable energy.

A high incidence of take-up of categories of small-scale renewable energy generation had been leading to some uncertainty in the pricing of renewable energy certificates in the medium to longer term. From the large-scale renewable energy investors’ standpoint, greater certainty about how their market would operate with respect to the pricing of renewable energy certificates was necessary. We have seen support in the industry for the set of proposed changes that the government have put forward, and I think that will lead to the necessary investments in renewable energy that will see us achieve the target by the year 2020.

On both fronts, on emissions trading and on renewable energy generation, the government remains committed to making the important institutional changes that will take this country towards a much cleaner energy future.