Wednesday, 10 October 2012
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012, Clean Energy (Charges — Excise) Amendment Bill 2012, Clean Energy (Charges — Customs) Amendment Bill 2012, Excise Tariff Amendment (Per-tonne Carbon Price Equivalent) Bill 2012, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment (Per-tonne Carbon Price Equivalent) Bill 2012, Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment (Per-tonne Carbon Price Equivalent) Bill 2012, Clean Energy (Unit Issue Charge — Auctions) Amendment Bill 2012; Second Reading
The Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012 and related bills which form this clean energy legislative package continue the government's steady and responsive policy progression towards a low-carbon Australian economy and a clean energy future. Unlike the opposition leadership's shallow politicking, flip-flopping and antiscience position—which flies in the face of the reality of dangerous climate change accepted by countries, including those led by conservative governments, all over the world—this government accepts the science of climate change and the natural consequences of that.
We have, since coming to government, moved through robust and exhaustive green and white paper processes to design, in consultation with the community and industry, an Australian form of the recognised best practice model for tackling climate change—namely, an emissions trading scheme. We then moved to legislate and implement that system, a system which guarantees carbon emission reductions and does so while engaging the market to determine the least cost path to shaping how those reductions are to be achieved. It is a system which, prior to 2007 and up until December 2009, had bipartisan support.
These bills take that progress further by formally linking our emissions trading scheme to the scheme that already operates in Europe, which involves an annual turnover of some 90 billion euros. This will mean that, from 1 July 2015, Australia's carbon price will be set by the global market and will be the equivalent of the price paid in 30 other countries, including the 4th, 5th and 7th largest economies in the world—those of Germany, France, and the United Kingdom. This meets the fundamental rationale of our policy approach, which is that Australia should be a proactive participant in coordinated and integrated global action—precisely because climate change is a problem we all share and, beyond that, because the economic, social and environmental impacts of climate change will be inflicted upon the Australian continent to a greater degree than upon many other parts of the world.
It does no credit to the leadership of the opposition to mock the European Union and to refer to actions taken by this nation and by other nations as 'economic vandalism'. This attitude, from those who purport to be the alternative government, is in fact incredibly damaging to Australia's international reputation and to business confidence. It is incredibly irresponsible, in contrast to the responsible position, based on good science and economics, which has been taken by this government.
At the release of the final Garnaut report in September 2008, Professor Garnaut identified five policy themes to guide Australia's approach to addressing climate change and he noted, with respect to the third theme—practicality—that a successful policy approach would only occur 'where the domestic framework is consistent with the international framework'. He also observed that 'the final report advocates judicious linking with international schemes'. That is exactly what is being achieved with this legislation. In essence, it provides for the removal of the floor price that was to operate in the first three years of the flexible price period under our emissions trading scheme, while limiting the quantity of eligible Kyoto units that liable entities can make use of to 12.5 per cent of their total carbon price liability—down from 50 per cent.
The agreement the government has struck to link the Australian and EU emissions trading schemes is part of ensuring that we are able to reduce carbon pollution at the lowest possible cost while retaining appropriate control over the incentives for reduction that exist under our scheme. Creating stronger links and greater integration between our scheme and those operating in other international markets has always been part of the plan—for obvious reasons. By linking our ETS to Europe, we provide a broader and more diverse range of abatement opportunities for liable entities in Australia, we increase the diversity and liquidity of the carbon market itself and we take a clear step in advancing the cause of global cooperation on climate change.
… is further evidence of strong international cooperation on climate change and will build further momentum towards establishing a robust international carbon market.
In assessing the significance of this achievement, we should remember that the European Union's emissions trading scheme is far and away the largest in operation. It involves all 27 European member states, as well as Norway, Iceland and Liechtenstein, and it applies to approximately 11,000 emitting facilities.
Our move to link the Australian system with the largest existing ETS is a step that is likely to be repeated by others as the emissions trading schemes being developed in China, Korea, California, Canada and South America come to fruition and seek integration with the growing international quilt of emissions reduction and trading schemes. As the Minister for Climate Change and Energy Efficiency said:
The fact of the matter is that every major economy tackling climate change and every major emitter has agreed to negotiate new arrangements, introducing binding obligations from 2020 to cut emissions. And Australia won't get a free ride in this.
We have to ensure that we are tackling climate change in the most economically efficient way and in partnership with our trading partners. A fully flexible internationally linked emissions trading scheme will enable Australia to do its fair share in this regard, its fair share of emission reductions, and in partnership with other important countries taking action. This is a good move for our economy and a very good move for our environment.
The Australian contribution to both the national and global effort to address carbon pollution and its serious climate change effects and consequences has come a long way in five years. The substantial progress we have made has occurred for a number of reasons but the most important is that the Australian people understand very well, and also accept, the common-sense proposition that carbon pollution, which has a cost, must have a price.
The opposition has been peddling an untruth in relation to electricity prices in Western Australia. The claim is that electricity prices have gone up 60 per cent as a result of the carbon price. In fact, the carbon price is responsible for around nine per cent of the price increase—and households have been more than compensated for that impact. More than 60 per cent of the electricity price rises in Western Australia are attributable to the actions of the WA state government. I think that needs to be on the record and I hope the Leader of the Opposition has the decency to stop telling untruths on this matter.
We have addressed, in the Australian context, one of human history's great economic blind spots: the failure to price carbon pollution into the market despite its grave and avoidable costs. Having done so, as one proactive nation among many, we can go forward with some measured confidence that the human capacity for innovation and problem solving will manifest within the framework we have established to reduce, on the one hand, carbon pollution, and to increase, on the other hand, the array of new energy and production methods and waste management technologies already flourishing in my electorate and right across this country.
I want to commend the minister for negotiating this important advance in how Australia's carefully calibrated emissions trading scheme will operate, allowing it now to dovetail into the world's largest existing scheme, with all the benefits this will deliver in both directions. We always said that, once established, Australia's emissions trading scheme would join and contribute to a much wider regulatory and functional shift in global markets—and so it is proving. In future, these shifts and linkages, these moments of connection and harmonisation, will become part of the story of cascading, necessary change.