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Wednesday, 14 September 2011
Page: 10003

Mr DREYFUS (IsaacsCabinet Secretary and Parliamentary Secretary for Climate Change and Energy Efficiency) (09:31): It is with great pride that I rise today to speak on the government's Clean Energy Future plan. In my first speech to this House three years ago I spoke about my hopes for this country's future, and I spoke about my belief that we should live in this land in a way that will leave it improved on our passing and not depleted. I spoke about my belief that we have a duty to sustain our land for the sake of our children and our children's children.

After decades of parliamentary debate about climate change, we have before this House a plan that has majority support within this parliament, a plan that will cut carbon pollution and drive investment in clean energy technologies and infrastructure, like solar, gas and wind. It will help build the clean energy future that current and future generations deserve, and it will ensure Australia's continued prosperity while decoupling economic growth from emissions. Put simply, this plan will leave our country improved on our passing and will deliver a better environmental and economic future for our children's children.

Central to the government's plan is a carbon price. While climate change science tells us we need to act, economic understanding tells us the most cost-effective ways of doing so—two fields that those opposite appear to have an inability or an unwillingness to grasp. Putting a price on carbon is the most environmentally effective and cheapest way to cut pollution. This is a fact that is well recognised by economists from Australia and around the world and respected institutions such as the Organisation for Economic Cooperation and Development and Australia's Productivity Commission.

Releasing carbon pollution is currently free in Australia, despite the catastrophic threat carbon pollution poses to our environment. To tackle climate change, therefore, we need to correct what is routinely called the 'greatest market failure the world has ever seen'. The government's carbon price mechanism sends a powerful price signal to the market that the emission of harmful carbon dioxide into the atmosphere can no longer occur without consequences. It gives effect to Australia's international obligations under the Climate Change Convention and the Kyoto protocol and ensures that Australia is on track to meet its long-term target of reducing net greenhouse gas emissions to 80 per cent of 2000 levels by 2050. And, as we know from the experience of other nations and regions, a constraint on carbon pollution will drive innovation across the economy. It will provide the incentive to find new energy and carbon efficient ways of doing business to invest in new low-carbon products and processes, and it will stimulate the scientific and engineering research that complements our transition to a low-carbon future.

Starting at a fixed price in 2012-13 and then moving to an emissions trading scheme, the carbon price will generate incentives to reduce pollution and invest in clean energy, breaking the link between pollution and economic growth. This is what the eminent economist Sir Nicholas Stern calls the new industrial revolution. Under the mechanism, around 500 of the country's biggest polluters will be required to pay for each tonne of pollution they release into the atmosphere. This creates a powerful incentive for all businesses to cut their pollution by investing in clean technology or finding more efficient ways of operating.

A price on carbon will also create economic incentives to reduce pollution in the cheapest possible ways, rather than relying on more costly approaches such as government regulation and direct subsidies. These incentives will flow through the economy. A carbon price will make lower polluting technologies, especially clean energy technologies, more competitive and will boost investment in those technologies in this way. Introducing a price on carbon will trigger the transformation of the economy towards a clean energy future.

Carbon pricing and climate change policy have been widely debated in Australia for well over a decade, including through no less than 35 parliamentary committee inquiries. The first review of emissions trading by an Australian government was in 1999, some 12 years ago. There was extensive policy work undertaken by the former Howard government, most notably by Peter Shergold, which concluded that pricing carbon was the best approach. The member for Flinders should be ashamed of his current stance. He spoke in 2008—and I am pleased he is here to listen to what he then said about the Howard government's plans for a carbon price. He said:

Perhaps the most important domestic policy in recent years has been the decision by the Howard government that Australia will implement a national carbon trading scheme. The task group on emissions trading established by the previous government concluded that Australia should not wait until a genuinely global agreement had been negotiated. It concluded that there would be benefits which outweigh the costs of early adoption by Australia of an appropriate emissions regime. The task group was also firmly of the view that the most efficient and effective way to manage risk would be through market mechanisms. The announcement in September last year by the previous government of a new national clean energy target was another important step towards a comprehensive national emissions trading scheme. Importantly, the coalition pledged to establish a climate change fund to reinvest a substantial proportion of emissions trading revenues in clean energy technology and support for households most affected by the impact of a price on carbon—in particular, low-income families and pensioners.

He said, 'We hope that the new government will take up this proposal.' Of course, we have taken up those proposals. In addition, Professor Ross Garnaut has conducted two major reviews on Australia's best policy options for tackling climate change.

The government's Clean Energy Future package was developed through a parliamentary committee process, the Multi-Party Climate Change Committee, which met for nine months before completing its work in July this year. The federal coalition, the Greens party and the Independents were invited to participate in the Multi-Party Climate Change Committee. Only the coalition declined. Today, from the Leader of the Opposition, we have heard yet more of the misinformation, seemingly wilful ignorance and relentless negativity that, regrettably, we have come to expect from the opposition over the past several months.

Moving to a clean energy future will provide new economic opportunities for Australia and its businesses and workers. Opportunities will open up in existing businesses. Jobs will be created in clean industries such as renewable energy generation, carbon farming and sustainable design, to name just a few. The government recognises that it is now time to act, to harness these opportunities. We recognise that if Australia fails to enact this vital reform the costs of tackling climate change will only become greater in the years ahead. Undertaking this reform will ensure Australian businesses remain globally competitive in the decades ahead.

The Gillard government recognises that the transformation of the economy to a clean energy future presents opportunities for industry but also challenges. Dynamic and competitive industries are essential for Australia's economy and for jobs. We are a Labor government and our priority will always be jobs. That is why the Clean Energy Future plan includes measures to support industry and jobs. The Jobs and Competitiveness Program will support jobs in high-polluting industries that have competitors in countries where those industries are not yet subject to comparable carbon constraints.

Over the first three years of the carbon price the government will devote $9.2 billion of the carbon price revenue to assistance for affected jobs in these industries. This assistance will be in the form of free carbon permits and will shield those business activities from the impact of a carbon price while maintaining incentives to invest in clean technologies, which will underpin their competitiveness as the world moves to price carbon pollution.

The Jobs and Competitiveness Program is not the panacea for supporting manufacturing in Australia. Under a carbon price it is essential that the government assists manufacturing directly, in improving energy efficiency and supporting research and development in low-pollution technologies. The government is also helping households and businesses improve their energy efficiency. The government's Low Carbon Communities program will be expanded to provide funding to local councils and communities to improve energy efficiency in council and community-used buildings and to assist low-income households.

Turning to the land, the government has excluded the agricultural and land sectors from the carbon price but these sectors will still have opportunities to secure economic rewards under the Carbon Farming Initiative. The farming, forestry and land sectors have as important a role to play in reducing carbon pollution as governments, households and other industries. The Carbon Farming Initiative rewards farmers and landholders who take steps to reduce carbon pollution above what commonly occurs. It works by creating credits for each tonne of carbon pollution which is stored or reduced on the land.

The Carbon Farming Initiative legislation, passed in the parliament last month, will commence operation from December this year. It will create a new income stream for farmers and new jobs for rural and regional Australia and will provide strong incentives to identify and implement low-cost methods of pollution reduction. Credits generated under the Carbon Farming Initiative and recognised for Australia's international obligations under the Kyoto protocol on climate change will be able to be sold to companies with liabilities under the carbon pricing mechanism. This includes credits earned from activities such as reforestation, savannah fire management and reductions in pollution from livestock and fertiliser use. People on the land will have an opportunity to earn new streams of income and contribute to the national effort to tackle climate change. The government will initially be investing around $1 billion in land sector measures over the next four years to support the Carbon Farming Initiative to reduce emissions and to maximise the benefits of storing carbon in our landscape.

It is resoundingly clear that if we do not reduce carbon pollution the world risks catastrophic consequences from climate change. The consensus among the scientific community is that our climate is changing and that human activity is causing it. In Australia and other polluting nations we must take action to cut carbon pollution if we are to prevent dangerous climate change. We know that fair and effective global action to achieve ambitious emissions reductions is in Australia's national interest. We need to demonstrate that we are willing and able to do our part.

The Gillard government is committed to ambitious pollution reduction targets as our contribution to global action. The bills before this House will put in place policies capable of delivering these targets. There is an optimism about Australia's low-carbon future, and it is an optimism shared by many countries around the world, most notably the United Kingdom. That is why the Prime Minister of the United Kingdom, David Cameron, wrote to congratulate our government for its announcement of the Clean Energy Future plan. The United Kingdom government understands—regrettably, our political opponents here in Australia appear not to—that the future of the 21st century lies in a low carbon economy. Unfortunately, amidst the optimism about Australia's low-carbon future, there skulks the Liberal-National coalition, wedded to old, dirty and inefficient technology, who have perfected the art of obstructionism and the drumbeat of no, no, no. The opposition have spent the previous year in hysterics over the carbon price mechanism. They have attacked the scientists and they have attacked the economists who are urging us to act. They pander to climate change deniers with an extraordinary level of wilful ignorance.

As representatives of all Australians we will be judged by our actions. Climate change is a global problem; it is a generational problem. Our strength in the debate as it unfolds over the coming months—the strength of the Gillard government and those who stand with us—will ensure the future prosperity of Australia and ensure that Australia is able to take its place with the other countries in the world who are taking action on climate change. I would urge members of the opposition who believe in this cause, members of the opposition who have publicly supported policies to put a price tag on pollution, to be courageous. We know that almost half of those opposite us support pricing carbon, support an emissions trading scheme. That is the policy that their party took to the 2007 election. That is the policy that their party supported right up to the end of 2009. I say to all those opposite, including the member for Flinders, that now is the time to cross the floor and vote for the Gillard government's plan for a clean energy future. You will be remembered for your actions, as indeed Senators Boyce and Troth are remembered for their action in crossing the floor in the Senate in late—

Mr Hunt: Troeth.

Mr DREYFUS: Troeth, I am sorry.

Mr Hunt: You made a point about remembrance!

Mr DREYFUS: Yes. From 1 July 2012, Australia will have a carbon price. I call upon all those opposite who wish to see the action we need on climate change to support these bills, as a majority of the members of the House of Representatives and a majority in the Australian Senate will be doing. (Time expired)