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Monday, 22 June 2009
Page: 3942

Senator PRATT (9:04 PM) —I begin my remarks this evening on the Carbon Pollution Reduction Scheme Bill 2009 and related bills with what is agreed by almost everyone in this chamber by quoting the majority report of the Senate Select Committee on Climate Policy:

The balance of the evidence ... suggests that climate change is occurring, is driven by anthropogenic factors and is a grave threat to accustomed ways of life and natural systems.

Those are Senator Colbeck’s words, not mine. I say almost everyone agrees with this statement because clearly there are some exceptions. One of those exceptions is a fellow senator from my own home state, Senator Cash, and indeed probably Senator Boswell as well. Senator Cash, in her own separate qualifications to her coalition colleagues’ majority report, said that she rejected that conclusion. Senator Cash also said that despite this rejection of the science she still believes the planet deserves the benefit of the doubt. But, although she believes the planet deserves the benefit of the doubt, she does not believe that we have a responsibility to act—or at least not before Copenhagen and not before the Obama administration does. So climate change becomes not our problem, it seems, but someone else’s responsibility. Senator Cash argues that to act prematurely would be to the detriment of Australians. She says it would cost jobs, especially in Western Australia.

Senator Cormann —And it will.

Senator PRATT —Sadly, her arguments are typical of those opposite. It is not a fact. It is very typical, however, as Senator Cormann has just proved my point. It is a typical argument of those opposite. They try to have a bet both ways on the science when the evidence indicates that we face a very grave climate risk. They talk of risks to the economy from the CPRS but ignore the risks of not acting on climate change, especially the risks to my home state of Western Australia—indeed, your home state, Senator Mathias Cormann.

Senator Cormann —It will do nothing. It will cost jobs.

Senator PRATT —They ignore the fact that south-western Australia’s significant drying trend is set to worsen under climate change, leading to 80 per cent more drought by 2070. They ignore the fact that the mean rainfall has declined dramatically in the south-west since the 1960s, causing an even more dramatic decline in downflows. They ignore the threat that climate change poses to Western Australia’s valuable agricultural industries if these trends continue unabated. There is a threat to our fisheries, especially our $300 million rock lobster industry, if the oceans warm and indeed acidify as expected. There are real jobs at risk in all of these industries if climate change continues unabated.

The international community needs to act on climate change and we need to be part of that deal. There is a very grave threat to homes and communities concentrated on the coast in Western Australia if sea levels rise as anticipated. There is also a threat to human health if temperatures continue to rise. In Perth, for example, where there are plenty of very hot days already, it is a regular occurrence for people to die. In fact, around 300 people over the age of 65 per year already suffer heat-related deaths.

Senator Cormann interjecting—

Senator PRATT —You can deny that these are the impacts of climate change, Senator Cormann, but I do not. These are very real impacts.

Senator Cash may say that she believes that the planet deserves the benefit of the doubt, but she does not mention these risks. These risks simply do not count for her, and clearly they do not count for the opposition. But these are the very credible risks of climate change for my home state of Western Australia. Instead, Senator Cash speaks of the jobs at risk in Western Australia in the mining and resources industry. But she does not bother to mention that the mining council itself admitted during the Senate inquiry into the bill that, even if the CPRS were introduced, the mining industry would continue to grow. So much for massive job losses!

Most importantly of all, Senator Cash and others like her base their case on a very wrongheaded choice: a devil’s choice between showing good faith in the lead-up to Copenhagen and purportedly saving Australian jobs. But this dichotomy is a false one, and unless it is exposed as false not only will we fail to do all we can to shore up a strong global agreement on climate change that places the interest of the planet front and centre but our economy will suffer as well. In a competitive global economy, it is those businesses and industries that adapt to change in the international environment that thrive in the long term. The international environment is changing as the world gears up to face the reality of a carbon constrained future—one that the opposition refuses to confront.

Many countries are already to moving to put a price on carbon, to encourage innovation and reward effort to minimise emissions.

Opposition senators interjecting—

Senator PRATT —The action being taken by other economies, both developed and developing, is outlined in an appendix to the government senators’ report of the Select Committee on Climate Policy, and I suggest you take a look at it. This evidence demonstrates that it is simply untrue to say that Australia would be acting alone or acting prematurely if this legislation were to pass prior to the Copenhagen conference. We are simply not acting alone or early. Other countries are acting now because they know that by acting now they will ensure that their enterprises, their industries and their economies will thrive in the long term, for the day will come when countries will no longer be able to afford not to have a price on carbon—and that day will come sooner than we think. The reality is that carbon emissions have an economic cost, and businesses that emit carbon must be able to bear a reasonable proportion of that cost or they will not survive long in a world which increasingly demands the cost of carbon pollution be recognised and allocated appropriately.

Imagine how we would react to a company that sought to operate as though labour could be had for no or very little cost, a company that saw slavery as a sustainable approach to the procurement of labour. Yet many businesses once defended slavery as an economic necessity, and those opposed to it were condemned as bleeding heart liberals. Lord Puttnam made this very point in the debate on the climate change bill in the UK parliament 18 months ago. He said:

Two hundred years ago, slavery was perhaps the primary source of energy, a cheap and apparently infinite generator of power, and regarded by many as the foundation stone of British commerce and prosperity. As with our energy industries today, slavery appeared to represent a large and vital component of the economy. At the time of its abolition, the slave trade and its associated activities were reckoned by those opposing the Bill to account, quite astonishingly, for well over a quarter of this nation’s GDP, a fact which helped to drive one of the central arguments deployed by the anti-abolitionists …

Conservatives defended slavery on the basis that industries were not sustainable without it. Conservatives also argued that, if businesses in one market stopped using slaves, they would lose out to competitors in other countries that did.

The irony, of course, was that, whilst slave labour might have been cheap, it was also extremely inefficient because while labour was cheap there was no incentive to use it efficiently. And so it is with polluting sources of energy. That is why parliament had to step in and say, ‘Regardless of vested property rights, this immoral use of resources has to stop.’ Fortunately, the UK parliament did take a stand on slavery, and of course it turned out that chains and whips were not the best means for maximising labour productivity. In fact, the abolition of slavery in Britain 200 years ago helped drive the industrial revolution in that country, which saw the British economy lead the world for the next century. To quote Lord Puttnam again:

… those same vested interests who argued that a speedy end to the slave trade would be ruinous were profoundly wrong. In fact they were doubly wrong. Far from proving damaging, the abolition of the slave trade allowed Britain to leap forward, as if a metaphorical ball and chain had been lifted from the economy. Slavery, far from being the foundation stone of prosperity, had in fact been a colossal impediment, a hindrance to the development of more efficient business formations, leading to the generation of many new forms of wealth and success. Not only had it been morally repugnant, it proved to have been economically illiterate.

We can see the way business changes happen over all time as norms about the efficient and ethical use of resources change, whether those resources are human beings or, indeed, a liveable planet. One of the consequences of failing to adapt as the world changes is that when change is finally forced upon us we will not be up to the challenge. This is why in the UK business is so positive about the British government acting on climate change. As James Cameron from Climate Change Capital explained to the Senate Select Committee on Climate Policy:

It is of no surprise that the CBI—

the Confederation of British Industry—

should be an advocate for economic instruments to reduce greenhouse gas emissions across the UK economy, and it is of no surprise to see them argue for greater clarity and a longer term framework for public policy to reduce emissions, because the CBI wants to see UK business position itself to be a winner from the technological and business innovation associated with coping with climate change.

And if we do not move with the times in Australia we will fall behind. As John Connor from the Climate Institute told the Senate Committee on Economics:

… if Australia does not get on board this train soon, we will be left behind. Our tragic history is one of coming up with the good ideas, but allowing that to go overseas for jobs and profit.

The change of pace is indeed much faster now than it was two centuries ago, when Britain abolished slavery. Climate change demands an urgent response, and the modern global economy, for all its imperfections, is sophisticated and flexible enough to respond fast. Businesses that persist in proceeding as though carbon does not have a price, has a very low price or has a price that someone else should bear will soon seem hopelessly antiquated. The failure to put a price on carbon will have a deadening effect on our industrial innovation and competitiveness.

Emissions-intensive industries need the benefit of a framework in Australia within which they can acknowledge their carbon liabilities if they are to move forward, and the legislation before us provides just such a framework. Low-carbon industries need a framework to guide investment decisions in order to take advantage of new business opportunities. As the Howard government’s own Shergold report predicted, the lack of any such framework is already imposing real costs on Australian businesses today. That is why a very wide range of business and industry witnesses, including the Australian Industry Group, the Business Council of Australia and the Australian Bankers Association, all told the Senate economics committee that business needs legislation this year to put an end to ongoing uncertainty.

Uncertainty is the enemy of investment and therefore of job creation. If we do not act now, rewards will be distorted. If we do not act now, the industries of the future will struggle to get off the ground, while those that must adapt to survive will put off until tomorrow what should be done today. Investment will be misdirected and opportunities will be lost. When the rug is pulled out from under our feet, our industries will prove incapable of surviving in a carbon constrained world. We will be left living in a carbon intensive cul-de-sac, with declining living standards and vanishing job prospects.

It can be argued that slavery still exists in some parts of the world. Yet those places are not beacons of liberty, prosperity and progress. They are backward places of tyranny, poverty and despair. It is those that abandoned this reactionary way of doing business, those that accepted their moral responsibilities, those that looked into the future, that have grown and prospered. As with the transition from slave to free labour, so with the transition from high pollution to low pollution. In this case, too, the right thing to do is also the smart thing to do. The smart thing to do is to give Australian industry every opportunity to adapt swiftly and seamlessly to the reality of a carbon constrained future.

Passage of the CPRS legislation will encourage industry to continue to improve its performance in relation to emissions. It will encourage investors and businesses to take advantage of emerging opportunities in a carbon constrained environment. It will support emissions-intensive trade-exposed industries to enable them to maintain their competitiveness through the transition. If we act wisely, we can have a healthy planet and wealth in our pockets. The moral imperative and the economic imperative are not in conflict here. They are, Senators, one and the same.

To those who believe this bill does not go far enough, I have this to say: yes, we could have acted earlier. If we had, we might well be in a position to do more now. But that delay was not of this government’s making and we cannot undo the past. If we try and turn this corner too fast we will lose control of the process and we will not have a smooth transition. There will be social and economic dislocation and the political will for change will be lost, and that is not going to benefit anyone, least of all the planet. Of those senators who do not accept this argument and who still believe this bill is not enough, I ask: when we agree that we have waited for too long already, how does further delay help?

The Europeans have capacity to now finetune their ETS because it is already in place. They are reaching higher now because they are able to draw on experience of their own schemes in action in the context of their own specific economic circumstances. In those countries, people can now see in practice the economic benefits of acting on climate change. They can see that the predictions of the sceptics, the doomsayers and the rent seekers have not come to pass and so they are prepared to do more and to move faster. We do not have that advantage, and we never will unless we make a start. Delay now will not help us reach a higher target; delay will certainly mean that our carbon pollution will continue to increase and increase—year by wasted year.

If we pass this legislation, we will give business the certainty it needs—the certainty it is demanding—to begin making the investments needed for the transition to a low-carbon future. Without legislation there is no certainty and no new beginning. We will not learn more or achieve more by further modelling or by grandstanding—we are way past that point. We will learn more by doing—by making a start. Climate change is the great challenge of this century and we need to put our shoulders to the wheel. We need to take this first, vital step towards a better future now. I urge all senators to vote for the second reading of the bills.