Speaking Up for Australia's Clean Energy Future

The Labor Party and Labor senators oppose the Clean Energy Legislation (Carbon Tax Repeal) Bill and related bills. Why? Because Labor's position on climate change is very clear. It is a clear position based on scientific evidence and sound economic principles. We on this side of the chamber understand the need to reduce the risk of dangerous climate change by cutting dangerous greenhouse gas emissions. We on this side of the chamber understand that the best way to do this is to recognise the real cost of pollution in the bottom line of our nation's polluters, and this is best achieved through a market based mechanism. Labor established such a mechanism and in the short time of operation this mechanism has delivered cuts to emissions with no negative effect on inflation and continued employment and economic growth.

The so-called 'carbon tax' or 'fixed price period', in Labor's view, can be removed leaving an already legislated emissions trading scheme which puts in place a legal cap on carbon pollution. We know that industry is quite capable of finding its best method of operating efficiently within that cap. We need the caps to comply with our international obligations to meet emissions reduction targets.

The bills before the chamber today remove Australia's ability to meet its binding international obligations to reduce the risk of dangerous climate change to our planet. Those opposite are ignoring the science, they are ignoring the future and they are ignoring the environment. They will create higher costs for our economy to adapt in the future and to manage the greenhouse pollution in our nation.

The coalition seeks, with no effective replacement mechanism for emissions reduction, to abandon the efficiency of a market based mechanism. Direct Action is a slogan, not a policy. Direct Action nationalises the carbon pollution problem, asking taxpayers to pay rather than the polluters themselves. Direct Action is flawed and cannot achieve our globally binding targets. Direct Action does not have legislated emissions reduction targets. If we pass these bills, there will be, in effect, no emissions reduction strategy in place for our nation. Direct Action will not exist when its predecessor is eliminated.

The collateral damage from these bills, which was noted in earlier debates, is the abolition of the Clean Energy Finance Corporation and the Climate Change Authority and the cuts to the funding of the Australian Renewable Energy Agency. This collateral damage is being driven by political ideology rather than by sensible climate change policy.

We know that the coalition are not at all serious about addressing climate change; it is not in their 'knitting'. John Howard calls those of us who accept climate change 'religious zealots'. As we all know, our Prime Minister, Tony Abbott, once said 'climate change is crap'. I know there are many on the other side who do not accept climate change, despite the scientific evidence. These bills demonstrate that they are winning the day; they are winning these debates within the coalition. There is a plethora of scientific and economic experts who back Australia's existing climate change strategy.

What I have found extraordinary during the hearings we have held on the Direct Action policy is that the coalition has been unable to put forward a single advocate for its discredited policy who is prepared to front up to the Senate committees and defend this policy as a good idea. Where are the recognised experts who say Direct Action is a good strategy? Where are the credible experts who say Direct Action will work? They are nowhere to be found, because there are none. We do not hear the cries for backing an expensive scheme to pay companies to pollute. Why would anyone support such a proposition? But we do hear that countries will achieve higher levels of emissions reductions at much lower cost because of the use of a market based policy.

While this government dismantles our functioning emissions reduction program and sits on its hands over climate change, the CO2 in the atmosphere is at a record high and Australia is on track for its warmest year ever. I have been dismayed this week to hear the Bureau of Meteorology warning West Australians that they face decades of rising temperatures, with hotter, drier and more extreme summers. This summer in Western Australia was the driest on record, with just 2 millimetres of rain for Perth; it was also the driest on record for Mandurah. Perth had only three days when rain fell, and not one drop fell last month—the first dry since February 2000. A Perth news report states:

The weather bureau is normally conservative—

as we all know—

but Bureau of Meteorology climate expert Neil Bennett said the data was staring climate change sceptics “in the face”.

It’s climate change. It’s warming. It’s staring you in the face …

As we said in the report of the Senate Environment and Communications Legislation Committee inquiry:

Removing this policy suite for the sake of a slight reduction in utilities costs in one financial year is reckless and irresponsible.

It is reckless and irresponsible to allow Australia to fall behind in our contribution to the global emissions reduction effort. It is reckless and irresponsible to expose us to future costs and potential international retribution for our contribution to global warming on this planet.

Late last year, in its Climate and carbon: aligning prices and policies report, we know that the OECD highlighted the need for countries to price carbon. It said:

If governments are serious in their fight against climate change, the core message of this reform must be that the cost of CO2 emissions will gradually increase, creating a strong economic incentive to reduce the carbon entanglement and to shift towards a zero carbon trajectory.

A central feature of such an approach is placing a price on carbon.

On a per capita basis, Australia punches above its weight in its contribution to global CO2 emissions. This is a well-known fact and it places a high moral obligation on us as a nation to keep pace with the world's efforts to tackle climate change; otherwise, we as a country are effectively a significant drag on the efforts of other nations. Why would they act when we as a country with a high standard of living are emitting above the per capita average—way, way above the per capita average. There is a profound moral obligation on our country to act. We had a credible policy that encouraged global action. That is what these bills are repealing. From being at the leading edge of this effort, we will be behind the rest of the world. Australia will become—and we are already because of these bills before us—a pariah in the international community because of the negative political will of a government that is putting the future of our planet last in its priorities.

Expert submissions to the Senate Environment and Communications Legislation Committee inquiry supported a carbon price as the most effective emissions mitigation strategy. One of those credible experts, whom I had the pleasure of seeing give evidence, is Dr Frank Jotzo. He said:

The carbon pricing mechanism currently in place is an economically sound basis for climate change mitigation policy in Australia. Repealing Australia's Clean Energy Legislation and related bills is undesirable if a lasting policy framework for greenhouse gas emissions reductions is to be established, and if emissions reductions are to be achieved cost effectively.

If emissions reductions are to be achieved without carbon pricing, then regulatory and subsidy approaches will need to play a larger role. These are generally more costly and less effective in creating incentives for long-term investment in low-carbon options by Australia's businesses. Repeal will exacerbate policy uncertainty, with adverse effects on investment.

And that is exactly the path that the government is taking us down. Mr Nathan Fabian, CEO of the Investor Group on Climate Change, said that a scheme cap that reflects an emissions reduction objective; broad coverage of sources of emissions in the economy; transitional assistance arrangements for trade exposed sectors; the ability to access international permits to achieve least cost abatement; and the capacity to respond to deeper reduction targets as necessary over time are the essential elements of good climate policy. The Wentworth Group of Concerned Scientists noted that the Productivity Commission considers:

… an emissions trading scheme is by far the most cost effective way for Australia to contribute to global efforts to mitigate climate change.

So what we have here is the coalition government's repeal bills and direct action policy creating a significant level of uncertainty in industry. Even worse, what we have here are these bills creating a dearth of climate change mitigation, and no-one really knows what the coalition will put in its place.

We know, from the evidence that our committees have received and from the lack of intellectual basis on which direct action is based, that the coalition's heart is not in place in any decent strategy to tackle climate change. It has no emphasis on a decent policy strategy. Worse still, these repeal bills mean we no longer have the economic tools we need for the future. This is not just about tackling climate change; this is about providing the capacity for our economy to transition to the economic future which we know is inevitably coming and in which carbon will be constrained. We in the Labor Party take tackling climate change very seriously—not just from an environmental point of view but also, very importantly, from an economic point of view. Having a long-term framework would mean we had stability and certainty for investors, industry and the wider community. Direct action, it is patently obvious, cannot deliver a long-term commitment. It is bound by the term of the forward estimates.

Personally, I think direct action is a policy the coalition have put forward so that they can be seen to be doing something on climate change when they do not mean it. It cannot set a cap. It cannot have a legislated binding target. It cannot be an effective policy. It creates uncertainty. It restricts innovation and investment in clean energy in our country. It is completely counter to any rational thinking. The coalition is stuck in short-term political thinking, more interested in political slogans about the carbon tax. The coalition government are here for today without regard for future generations. They are here exploiting the situation for maximum political profit, and they are leaving a policy wasteland in their path.

I am pleased to say that we do not think like that on this side of the chamber. We are about the future: we are about opening the door for our society to develop and thrive into this century and the next. We know that the short-term thinking the coalition is putting forward will make our local industry less competitive, not more competitive. The Prime Minister's claim of an average reduction of $550 a year for households is completely flawed. He said household electricity costs will be $200 less and gas $70 less, but there is no evidence that substantiates this. The Grattan Institute, ACOSS and other significant stakeholders that I do not have time to quote directly have all refuted these claims.

Labor's clean energy package included the Jobs and Competitiveness Program, which smoothed the transition for emissions-intensive and trade-exposed industries. These industries have no clear path forward under the coalition's direct action policy; instead, uncertainty is being locked in. These industries will need to change for the future at some point, but you are removing the tools and the capacity for them to do that. What we have in our existing policy, with legally binding caps, gives certainty and the capacity to meet future targets and to allow industry to transition. It gives flexibility for companies to choose how best to meet their emissions obligations within the targets set.

Our existing policy is achieving carbon mitigation outcomes, and we have a government that is trying to throw that all away. Future generations will ask, 'Why did they throw it all away?' History will show that we have a Prime Minister who was stuck in the past, who chose to abandon rational, functioning policy for short-term political gain. As we heard in the hearings: Direct Action is a policy that is not based on any scientific evidence or on any credible economic framework.

To conclude my remarks on these bills, the reality is that the world, with or without us, will be moving to an energy revolution—a revolution in the way that we generate and use energy for domestic, commercial, industrial and transport purposes. If you accept—and I certainly do—that climate change is real and is caused by carbon emissions then you have to recognise that having the tools to reduce the carbon in our atmosphere is a basic economic necessity. Failing to provide these tools, as the coalition is doing, will leave our households and businesses without the capacity to adapt, and the rest of the world will benefit from changes. Australians will be left in the dead-end jobs of yesterday, while other countries will have a competitive advantage; they will be way ahead of us. This is the path which the coalition is leading us down. We do not want to see our great technologies go offshore, without the investment being made in that technology here in Australia.

We cannot afford to miss the boat on this. It is our opportunity to have the leading-edge industries of the future. We cannot afford to be left behind on that front. Labor's Clean Energy Future package gives Australia the framework to keep up with the rest of the world—the framework that those opposite are repealing. The coalition want to destroy that framework and, along with it, the associated investment, business and jobs. We oppose the bills for the sake of our environment and for the sake of the jobs of the future.

Hansard Transcript