Monday, 18 November 2013
Clean Energy Legislation (Carbon Tax Repeal) Bill 2013, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment (Carbon Tax Repeal) Bill 2013, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) (Transitional Provisions) Bill 2013, Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment (Carbon Tax Repeal) Bill 2013, True-up Shortfall Levy (General) (Carbon Tax Repeal) Bill 2013, True-up Shortfall Levy (Excise) (Carbon Tax Repeal) Bill 2013, Climate Change Authority (Abolition) Bill 2013, Customs Tariff Amendment (Carbon Tax Repeal) Bill 2013, Excise Tariff Amendment (Carbon Tax Repeal) Bill 2013, Clean Energy (Income Tax Rates and Other Amendments) Bill 2013, Clean Energy Finance Corporation (Abolition) Bill 2013; Second Reading
Zoe Reynolds is an amateur photographer from Clovelly, in my electorate of Kingsford Smith. For years, Zoe has been capturing the many ocean pools around Sydney's east. Her images tell the story of the wonderful beauty of our coastline, but they are also studies in the changing nature of our oceans.
Through her work, Zoe has noticed that the incidence of inundation of our coastal rock pools is increasing. It used to be the case that a huge surf or a king tide was required to breach the concrete constraint and make those pools unswimmable. But that is changing. That is not the case any more. Now, it appears, a regular high tide or an average sized wave is enough to create a washing machine in the many pools along our coastline and make them unswimmable. Put simply, Zoe believes that the sea level is rising—and her photos prove it.
For some years now, climate scientists have been predicting that our sea levels will rise and they are certain that this is due to human induced global warming. The most recent scientific data, an update, again reinforces this forecast. The fifth report of the Intergovernmental Panel on Climate Change, released this year, concluded: 'Warming of the climate system is unequivocal and sea level has risen.' That is the view of the experts. That is the view of the people who make it their life's ambition to study the changing nature of our climate. If we now know beyond doubt that Mother Nature is warning us to change our behaviour, we need to seriously consider the consequences of no action or, importantly, the wrong action to combat climate change, and ensure that we as a nation get it right.
That is why the Labor Party is taking the principle position that it is taking on this important issue. If we misjudge our policy approach in tackling climate change, we will all pay. But alarmingly—and most disturbingly—it will affect our children, more than any other. They will bear the unbridled economic and social brunt of a mistake on climate-change policy.
Australia is a nature of weather extremes, of droughts and flooding rains, as it has been famously put. Failure to tackle climate change and global warming will see a greater incidence of extreme weather events that we will all pay for. The rebuilding of infrastructure and private property is covered by all of us through our insurance premiums and through government expenditure when we experience extreme weather events. It appears, unfortunately, that extreme weather events in the north of Australia in the summer are becoming an annual event. Most insurance providers now understand the threat of climate change, have outlined the potential costs of the looming threat and have been vocal in supporting action on climate change policy. In many respects, we have already begun to pay for climate change through our premiums. The effects of floods in North Queensland flow through to all of us through our insurance premiums. Many local governments, particularly those on the coast, have accepted the advice of scientists and tailored their development control plans to account for a receding shoreline or a bulging river. Our farmers are beginning to notice the changes in life cycle patterns of certain pests and insects, with correlated effects on crops.
We all know we need to take some action to reduce carbon emissions. What we have not been able to agree on at this point is what form that action should take. The coalition intend to repeal the carbon tax. That is not disputed. It is supported by the Labor Party. The real question becomes—and what they must tell the Australian public is—what system do they intend to replace it with? I have mentioned already that we need to take action. What is the system that the new government intend to put in place to replace the carbon tax? The policy that the coalition took to the election was called direct action, a system of subsidies to companies, paid for by all of us through our taxes, because there is no cost-free way—despite what those opposite might say about the illusion of direct action—to reduce emissions in our economy. It is paid for by all of us through our taxes, through subsidies to install clean technology and, hopefully, reduce emissions. That is the important word here: 'hopefully'. There are no guarantees under the direct action system. Because there is no cap on emissions, there is no guarantee that Australia as a nation will meet our international commitments. There is no guarantee that Australia as a nation will be able to reduce the effects of climate change and not pass on that unbridled economic cost to the next generation of Australians.
If we are to have a real impact on carbon emissions, then all big polluting companies, not just a few, must have an incentive to reduce their carbon emissions. We must all change our behaviour. That is the only way we are going to get an effect on emissions. It is not fair for some to get the benefit of government support to reduce emissions and others not to. Subsidies or so-called direct action will only change the behaviour of those who receive the incentive. Only those who get the subsidy will have the incentive to reduce their behaviour. Those who do not receive the incentive will go on polluting. Those who do not receive the subsidy will go on polluting in the same manner as they have in the past. In fact, they gain a competitive advantage over those who have been provided with the incentive to reduce their emissions, because there is no disruption to their normal production methods. They do not have to go through the disruption of installing renewable energy technology or cleaner technology to reduce their emissions. So the bizarre irony of direct action is that those who receive the subsidy, who receive the payment, get the incentive to reduce their emissions, but those who do not, who continue to go on polluting, have no impact on their business. In fact, they gain an advantage. That is the great misunderstanding, the great irony, of this policy and why it will not work.
Although we all pay the cost of such a scheme through our taxes, only those who receive the subsidy will benefit. This is an unfair and inefficient system. More importantly, it will not work. It will ensure that our children have to clean up the mess that we leave them. The costs of dealing with climate change will become much more drastic, much larger, the longer we wait. This is something that is agreed upon internationally by all respected economists: the longer we wait to tackle climate change, the greater the cost will be. If we fail to take the right action, then we simply pass that cost on to our children. I have two children, and as a decision maker in this place I cannot for the life of me see how we as responsible adults can take such a decision.
An economy-wide cap-and-trade system for reducing carbon emissions will guarantee that we are able to reduce emissions in the cheapest and most efficient manner possible. That is because as a nation we can set a realistic cap. We can put a cap on carbon emissions and we can allow businesses to do what they do best, and to make their own decisions about how they reduce their pollution over time. That is the way market based economies work. We do not force companies to make decisions, as they do under command economies; we provide the right policy mechanisms and the levers for companies to make their own decisions, to reduce their emissions over time in the manner that they find the cheapest and most effective without harming their production of goods for market. This is a cheaper, more efficient and more effective option and it fits well with our market based economy. More importantly, it also represents our generation taking responsibility for the challenge we face rather than passing the cost and responsibility on to our children.
The Prime Minister's feelings on climate change were made clear a long time ago. 'Absolute crap' is the way that he described the science around the greatest moral challenge of this generation. Since that time, the rhetoric has softened somewhat. The advice was given that the Prime Minister should tone down his language if he wanted to win an election. But the coalition's attitude, under their leader, has retained the same level of disdain, and that is evident in the policy that they are putting forward to this parliament today. Their direct action policy is proof of this.
Since 1992 there have been no less than 37 parliamentary inquiries into the question of how we reduce emissions in our economy and the most efficient and effective way. Thirty-seven parliamentary inquiries and each and every one of them, including the Shergold review, which was commissioned by former Prime Minister John Howard, has recommended that a market based mechanism similar to an emissions trading scheme or a price on carbon is the most efficient and effective way to reduce emissions in our economy. What are we to do as a parliament? Ignore the advice of 37 separate parliamentary inquiries which have been advising this government and governments of the past that the cheapest and most effective way to reduce emissions is through a market based mechanism? That is exactly what this government is doing—ignoring the advice of the experts, ignoring the advice of 37 parliamentary inquiries, for cheap, cynical political means to win an election.
Instead, they have chosen to take an axe to some of our most important institutions charged with the task of leading the nation to cleaner future. They will cut funding to the Australian Renewable Energy Agency by $435 million and defer a further $370 million in investment. The Australian Conservation Foundation's campaigner Tony Moore said in the Sydney Morning Herald that the cuts:
… will starve research and development of clean energy in Australia, moving us back to the back of the global race for clean tech.
Investment in renewable energy will be diverted away from the Australian economy. It will go to other nations that are interested in seriously reducing and tackling climate change. So too will the jobs. The jobs in the new economy will move away from Australia, because the investment will not be there in clean energy anymore. This is in addition to the axing of the Clean Energy Finance Corporation, the body entrusted with assisting business to commercialise clean energy projects in our economy. It paints a vivid picture of the coalition government's indifference to the task of tackling climate change.
Labor, on the other hand, much like the vast majority of economists, believes that an emissions trading scheme is the most cost-effective way deal with carbon pollution. That is because you can put a cap on emissions. We can guarantee as a nation that over time the policy will be effective—that we can reduce emissions in our economy. It is a market based mechanism, which means that we allow businesses to make their own decisions about how they reduce their emissions over time without harming their business. More importantly, it represents this generation of Australians taking responsibility for making decisions and implementing an effective policy to tackle climate change.
One of the great ironies of the direct action policy that has been put forward by the Liberal government is the fact that it is a subsidy scheme. Here we have the bastions of the market based economy, the Liberal Party, advocating a subsidy based scheme to reduce emissions in our economy. I find it highly ironic—