I rise to speak on the Carbon Pollution Reduction Scheme Bill 2009 and related bills. By voting to support these bills, we will be able to stop the rise in carbon emissions in Australia and begin the trip along the path to a low-pollution future. This has to be done because, quite simply put, climate change threatens Australia’s way of life, the environment and ultimately the economy. Now is the time for reform and essential to that is placing a limit and price on carbon emissions.
The design principles for an emissions trading scheme have been around for a long time, and the Rudd government has held to these principles. This scheme has not been developed simply for today; we are thinking of the future of Australia. Our proposal will change the way our economy and the market work, ensuring that economic decisions in the future factor in the climate. The Rudd government has had a clear picture of what we want to achieve in this area—that is, to significantly reduce emissions at the lowest economic cost but with the potential to drive growth, establish jobs and build up new industries. The Carbon Pollution Reduction Scheme will see the most significant environmental and economic reform in Australia’s history. The CPRS aims to reduce the carbon footprint of each Australian by one-third as a minimum over a 10-year period. The Rudd government understands the effects of climate change and knows that action must be taken now for the benefit of generations to come.
The Implications of climate change for Australia’s World Heritage properties report commissioned by the ANU and released recently finds that 17 of Australia’s iconic World Heritage properties are at risk from climate change. Sites such as Kakadu National Park, the Great Barrier Reef and the Tasmanian wilderness in my own home state, to name just a few, have been identified as particularly vulnerable to the effects of climate change by reduced rainfall, higher sea or land temperatures, rising sea levels or more severe storms. The collapse of our World Heritage areas would be a severe loss to both local and global communities. We need to take action now to make sure they are safe in the future. The Rudd government is committed to decisive action on climate change both at home and globally. The Rudd government recognises that building resilience to climate change is critically important. The Rudd government acted early by ratifying the Kyoto protocol, which the former Liberal government failed to do. Now we are acting by introducing the CPRS.
The Intergovernmental Panel on Climate Change, which consists of over 1,250 scientists from across the world, cites Australia’s vulnerability to the vagaries of climate change, with our water resources, coastal communities, natural ecosystems, energy security, health, agriculture and tourism all to be seriously affected if temperatures across the globe rise by three degrees Celsius or more. As we all know, Australia is a massive continent, with the majority of its population living in the coastal regions. This means that most Australians are at serious risk if the ocean level continues to rise, with homes and businesses likely to suffer. It is credible to say that the water level may rise by one metre before the turn of the century. The recent Copenhagen synthesis report found that climate change was accelerating and the risks were more serious than previously thought. Changes to Australia’s climate are already occurring over and above natural predictability, and these changes are expected to have an impact on Australia’s biological diversity. The Third assessment report of the Intergovernmental Panel on Climate Change concluded:
Australia will be vulnerable to the changes in temperature and rainfall that are projected to occur over the next 100 years.
The report also identified that natural resources and biodiversity conservation are likely to be strongly affected by climate change, as climate change is likely to add to the existing substantial pressure on these areas. There is a growing catalogue of documented changes that are consistent with climate change predictions, and there is reasonable scientific consensus on the expected types of impacts on species and the ecosystems from future climate change. A significant loss of biodiversity is expected by 2020.
Climate change is a stress to Australia’s biodiversity and ecosystems, which are already under pressure from human impact. Although our plants and animals have evolved to cope with large year-to-year climate variability, there are many species that have narrow long-term average climate ranges. These species and ecosystems could be highly vulnerable to the rapid and sustained increase in long-term average temperatures of one or two degrees Celsius, which have been projected under climate change scenarios. The reality is that climate change is with us and unless we act now it will only get worse.
Responsible management of climate change is also responsible management of the economy. The two go hand in hand. The earlier the government acts on climate change, the less expensive that action will be. The former Howard government had 12 years to act but, despite much research and many reports, failed to do so. The Rudd government is making up for lost time. Treasury modelling has shown that countries that delay action will face costs 15 per cent higher than those that act now. Such a significant saving is just another reason why we need to take action now. The Liberal Party argue for a lower deficit but will not support this opportunity to save some money in the long term. The present global financial crisis has made life tough for Australians but has not lessened the effects of climate change or the benefits that taking action will bring. In fact, the GFC has made it even more important that we act now to manage the economic challenges we are facing. At greatest risk are the agriculture and tourism industries. We need to act responsibly to ensure that these industries are protected. Failure to do so will certainly mean a significant number of jobs will be at risk or lost. One of the many positions that the Liberals has involves Mr Turnbull wanting no less assistance for Australian industry than will be offered by the United States for industry there.
From the outset, the Rudd government has committed to a cap-and-trade system. This is the only approach that can give Australia the assurance that carbon pollution will be reduced. Australia has committed to clear targets that enable us to be part of the global solution. The CPRS will best manage the economic impacts of transition to a carbon constrained economy, and the G8 summit in Italy reinforced that this is the way the world is moving. To ensure fairness and the greatest cost-effectiveness in spreading the burden of reducing carbon emissions, our scheme should have the greatest possible coverage. Our scheme will link internationally in order to enhance opportunities for Australia and to strengthen global carbon reduction efforts. And, importantly, we have committed to supporting industry’s transition to a low-pollution future and assisting households to adjust to the impact of putting a price on carbon.
According to CSIRO research, taking action against climate change now may create as many as 340,000 jobs in the transport, construction, agriculture, manufacturing and mining industries over the next 10 years. Within the agricultural industry, failure to act on climate change could see exports fall by up to 63 per cent in the next two decades. By 2050 exports may have decreased by up to 79 per cent. Under the CPRS there will be no cap—that is, no limit—on the number of free permits available to emissions-intensive trade-exposed industries. To start with, more than 25 per cent of all permits will be free and that number will automatically rise as necessary with growth in these industries. Under the CPRS, Australian emissions-intensive trade-exposed industries will receive a greater proportion of free permits than is being proposed in the US, and the US proposal is firstly to cap and then to reduce free permits. It is wrong for the Liberals to say that the Waxman-Markey proposal is more generous than the CPRS. Where industry in the US will have to share in the 15 per cent of free permits being allocated at the beginning of the scheme, in Australia industries will have certainty on the number of free permits they will receive over many years.
Businesses largely recognise the unavoidability of a carbon price and last year rejected the US approach on emissions in consultations. We accept that businesses need to know, and have every right to know, how the price will be determined. In order to make investment decisions, it is critical that businesses know how the price of carbon emissions will be determined. The CPRS will make it possible to set a price through market mechanisms. This certainty is needed to protect not only jobs but the economy as a whole. The Business Council of Australia and the Australian Industry Group recognise the importance of having this certainty. Businesses want the government and the coalition working together to provide this certainty. Unfortunately, though, the coalition have been doing everything possible to hinder the passage of this legislation. They think Australia should wait and see what the United States does with regard to this issue. Deferring decisions until after this issue is resolved in America will only lead to ongoing uncertainty for Australia and Australian businesses.
The Australian government has clearly indicated what will happen and has set aside money in the Climate Change Action Fund to help make the transition smoother for all concerned. In Australia, all the money that comes from the permits will be used to help both businesses and households manage the increase in everyday living costs. In 2009-10, the government has put $200 million into the Climate Change Action Fund. Initially, the CCAF money will be used to help businesses to identify areas where efficiency can be improved and to help make those improvements a reality.
Yet another position of the Liberal Party is that they want the Productivity Commission to review the CPRS. This is pretty ridiculous, as the commission has already undertaken a review and that review contradicted the apparent views of the Liberals. So I am not quite sure why they want the commission to review the scheme again, other than as another delaying tactic. It is beyond me but, as I say, it is yet another delaying tactic.
Australia is in the leading group of nations when it comes to understanding and acting upon climate change. Australia will continue to be a world leader under the Rudd Labor government. The coalition are clearly wasting time by refusing to pass this legislation. If they really believed the government’s policy was wrong, they would offer an alternative, but they have not—or at least they have not offered a policy agreed to by the party. They are a political party in turmoil. Refusing to put the best interests of the Australian public first is reason enough to conclude that the opposition are not suitable to govern this country. Of course, there are numerous other reasons to arrive at this conclusion, but I will not go into those in the short time I have left.
The Australian public obviously agreed with this sentiment in November 2007 when they voted for the Labor Party to act on this and many other issues. The business community has been given more than adequate notice about this legislation and the impact it will have if it is given royal assent. The finance industry has said that the impact on businesses will be minimal. In their analysis, Goldman Sachs JBWere stated:
… Far from putting companies in financial trouble, the CPRS will have negligible financial impact on Australian Companies.
The government stands behind the CPRS and the research that has been used to draft the legislation, including the modelling undertaken by Treasury that shows that the CPRS will cause major industries to see considerable increases in employment by 2020. I reiterate: The Rudd government is committed to being a world leader on climate change. The CPRS is the first step towards tackling the serious problem that is climate change. This legislation is backed by solid research and is supported by the business community. The opposition are without a doubt divided on this issue and, as I said, have not put forward any credible alternative policy. On one hand they extol the virtues of mirroring the US emissions trading scheme, but on the other hand they want us to consider the completely different approach that was put out by Mr Robb recently of an untested baseline and credit. The Liberal Party lack credibility, especially economic credibility. They lack cohesion, they lack detail and, most of all, they lack relevance. A party that cannot determine its own policy is no alternative government for the people of Australia. This is the most important environmental and economic reform in Australia’s history. Those in the Liberal Party know what they should do: they should vote for it.
In my conclusion, I would like to point out to members on the other side that yesterday a report was released that shows Australia’s carbon pollution will continue to rise if the Carbon Pollution Reduction Scheme does not become law. The Tracking to Kyoto and 2020 report shows that without the scheme in place emissions will be 20 per cent above 2000 levels by 2020. The increase in carbon pollution that will occur if we do not put this scheme into place is equal to more than doubling the numbers of cars on our roads between now and 2020. Our commitment under the Kyoto protocol to limit the growth in carbon pollution against business’s usual projections is only a first step in taking responsible action on climate change. We need to actually reduce our carbon pollution, and this will not happen unless the Carbon Pollution Reduction Scheme is put in place. I commend the bills to Senate.