Wednesday, 3 June 2009
Carbon Pollution Reduction Scheme Bill 2009; Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009; Australian Climate Change Regulatory Authority Bill 2009; Carbon Pollution Reduction Scheme (Charges-Customs) Bill 2009; Carbon Pollution Reduction Scheme (Charges-Excise) Bill 2009; Carbon Pollution Reduction Scheme (Charges-General) Bill 2009; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) Bill 2009; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) (Consequential Amendments) Bill 2009; Excise Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009; Customs Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009; Carbon Pollution Reduction Scheme Amendment (Household Assistance) Bill 2009
In this the 21st century, in the year 2009, it is time for our generation to begin to live on environmental interest instead of the environmental capital on which we have lived, particularly since the beginning of the Industrial Revolution and, more recently, since the 1970s. There are, however, a number of facts which I think need to be introduced into this debate on the Carbon Pollution Reduction Scheme Bill 2009 and related bills, which has been characterised more by emotion in the media and the broader community and, I dare say, even in the parliament.
The first is in terms of science. I cannot recall in my life a scientific issue where there has been such a large minority of scientific opinion—most of it credible scientific opinion—questioning the broad consensus of the majority, upon which this legislation is based and which it is intended to meet, and upon which much but not all of the world is intending to act. The second is that for us as parliamentarians, as legislators, whatever our background—and in my own case it is as a medical graduate, which is not in itself a scientist—our responsibility is to accept the broad consensus of scientific opinion whilst observing and noting that there is a growing minority of scientific opinion which contests the consensus of the IPCC.
That having been said, Australia’s emissions currently represent 1.4 per cent of global greenhouse gas emissions. On current trends, by halfway through this century, China and India will be emitting one-third of global emissions. That is more than the United States, the European Union, Brazil, Japan, Canada and Australia combined—by which time Australia will represent, on current trends, about one per cent of global emissions.
This country is currently the world’s largest exporter of coal, the largest producer and exporter of alumina, the third largest exporter of aluminium, the second largest exporter of uranium and the fifth largest exporter of LNG. For those who hear that data and think it might be trivial in some way, just reflect, for example, on today’s national accounts and the fact that they are the way they are by virtue of Australia’s trade and trade balance.
The next thing that is important for us, I think, is a matter of principle. We need to proceed with caution. As speakers on both sides of the debate have said, this is the most significant government-imposed change to the economic architecture of this country, certainly, in my lifetime and I think the lifetime of all of us in this parliament. There are, in my opinion, five principles upon which we should proceed. The first is that we have to make a proportionate contribution to addressing climate change—no more, no less. I am a human being, I am a global citizen, but I am an Australian and I am a member of the Australian parliament. It is my responsibility to stand up for my country and see that we carry our fair share—no more and certainly no less.
The second principle is that we have to do so while maintaining the strength of the Australian economy. I have obligations to my great-grandchildren and subsequent generations to give them a planet in good working order. But I have responsibilities to my children to see that they carry the reasonable prospect of having a job and enjoying a standard of living of which I can be proud and in which they can have confidence.
The third principle for us is that we have to see that this country continues to provide affordable, low-emissions, cost-effective energy to Australian households and to Australian industry.
The fourth principle is that we have to continue to provide resources and energy to the rest of the world.
The fifth principle, I think, is that this country should be putting as much effort into preparing for the inevitable and unavoidable consequences of climate change as we should into actually trying to stop it.
The reality of the environment that we are in now is that the Prime Minister and the government—to their credit, in my view—have accepted the need to postpone the implementation of an emissions trading scheme. But they are not yet going as far as they should. So, too, I am very pleased to see that significant members of my own party have recognised the importance of delay. That is something that is also to be welcomed.
But there are a number of issues that I think we need to be particularly focused upon. If Australia emitted absolutely nothing we would make no difference whatsoever to climate change. In fact, if we reduced our emissions by 60 per cent by 2050 we would reduce global emissions by 0.653 per cent—in other words, close to nothing. The Chinese are constructing a new coal-fired power station on average every five days. If India, China and the United States are not committed to act and to act in a proportionate way, not only on a country basis but on a per capita basis, then Australia will be conducting an exercise in utter futility—in fact, far worse than that, we will be committing a form of economic suicide for no appreciable environmental gain at all. What is it in this country that has led us to become a collective of intellectual lemmings? It seems that much of this debate is characterised by a religious, evangelical zeal that has you either at one extreme end of this debate or at the other.
In my electorate of Bradfield, on the upper North Shore of Sydney, adjusting to climate change in most but not all cases is an inconvenience—solar panels on the roof, a 30 per cent increase in your electricity bill, maybe buy a Prius, adjust your behaviour, turn off a few TVs in your two-storey house. But the further you go from my electorate, out into the more typical socioeconomic parts of this country, it is going to be about survival. It is going to be about feeding, housing and clothing your children; being able to decide whether you can afford to run a car and, if you own one, to actually drive it; and whether you can afford to remain on the land, be it in dairy, wheat or any other kind of agricultural activity in this country. There are many people who live in the inner suburbs of our cities who seem to think that in some way you are being an environmental vandal by not supporting this. What they fail to understand is that cement manufacturing, sugar refining, petrol refining, electricity generation—all of those things that they so often take for granted—are the industries that are going to be most directly affected by this.
I have confidence in Treasury—to a point. But one of the reasons we are moving the amendments we are—in particular for the Productivity Commission to spend six months having a look at this—is that the Treasury, in my view, has made implausible assumptions about the capacity of Australian industry to adjust to this and to adjust within the time frame it has assumed. Its estimates of the international price of gas and electricity are unrealistically low. It also has taken no account of the impact of the global financial crisis. I might also add that this is the same Treasury that, after Centro reported it could not refinance its $1.3 billion and issue a share dividend in December 2007, apparently failed to appreciate the economic tsunami that was coming towards us. It is the same Treasury that in 2007 underestimated the size of the surplus by 59 per cent and overestimated economic growth by 37 per cent. I apologise to Treasury in this sense, but I do not believe the assumptions upon which this legislation is based and is being presented.
We also think that it is very important—I was of this view last year; I remain of it—that we see that we are part of a global response. In terms of changing our economic architecture, of effectively in the first year increasing the GST from 10 per cent to 12½ per cent—that is the economic impact in 2013 under this legislation—we must make sure that the United States, China and India in particular are committed and are going to act and that we make a response based on that as much as anything else.
I am also deeply concerned about the idea that we are going to have our emissions-intensive trade-exposed industries pay a net effective tax of $12 billion over the first five years of this program. In the end it is the constituents of members here who represent low- and lower middle-income communities in this country who will pay for it.
I believe, in concluding, that most Australians will, with good leadership on both sides of the parliament, accept by a bare majority higher energy costs, higher transport costs—even less job security. But they will not, nor should they, accept those under any circumstances if the rest of the world, particularly the United States, the Chinese, the Indians and others are not making their fair contributions. The Prime Minister has couched this, sadly, very much in political terms. I will be very interested to see the Labor members prosecute this argument to many of their constituents, when they realise that Kyoto was not something on a Japanese restaurant menu but rather a formal agreement—and, further, what the rest of this is going to mean. It is time for us to put our country’s interests first. That is why the amendments moved on this side should be supported by the government. And I think the government, if it were considering the advice of the wiser people within it, would find some way of accommodating them.