Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

My question is to the Prime Minister. Will the Prime Minister explain the significance of the Carbon Pollution Reduction Scheme to Australia’s economic and environmental future?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I thank the member for Chisholm for her question. Indeed, the Carbon Pollution Reduction Scheme has been the subject of some discussion and debate in recent days on both sides of the House. The Carbon Pollution Reduction Scheme, if you drill into its absolute essentials, is about reducing carbon pollution, it is about helping families with the adjustment costs arising from a higher price of carbon, it is about helping industries adjust, it is about boosting green jobs for the future and it is about helping cool the planet. That is why we are engaged in this Carbon Pollution Reduction Scheme.

The Department of Climate Change and Water forecasts that Australia’s domestic emissions will peak between 2011 and 2013. For the first time in our nation’s history Australia would then be producing less carbon each year. This is something of which every Australian could and should be proud. Furthermore, it is forecast that by 2020 the government’s climate change measures will have reduced carbon pollution in Australia by 138 megatons below the business as usual baseline. Again, this is something of which all Australians should be proud. On top of that, if you translate that into a motor vehicle equivalent, the numbers are quite stunning. It is equivalent to reducing Australia’s carbon pollution by taking 35 million cars off the road. That is approximately twice the size of the entire Australian motor vehicle fleet. This, again, is something of which all Australians should be proud.

Treasury modelling also has provided us with advice about the impact we will face across the Australian economy as a consequence of this action through the CPRS, particularly in relation to the further growth of the renewable energy sector. Treasury modelling projects that by 2050 the Australian renewable energy electricity sector will be 30 times as large as it is today. This is what we call green jobs for the future.

The Climate Institute study shows that $31 million of clean energy projects are already underway or planned in response to the government’s climate change policies. Again, this is good news for green jobs and for the economy. These investments are expected to generate around 26,000 new jobs, many of them in regional Australia. So these are good developments when it comes to the overall economic impact of introducing a carbon pollution reduction scheme as well.

Beyond that, for the business community, an important consequence flows from the agreement reached between the government and the opposition on the passage of this Carbon Pollution Reduction Scheme through the Senate. The agreement reached with the opposition yesterday will result in the CPRS now providing business with the certainty to make investments in the future. This is what business has been calling for for a long, long time. I would quote what the head of the BCA has had to say about this only in the last day or so. Graham Bradley, the BCA President, said:

When passed, the legislation will enable Australian businesses to plan for and make the required decisions about investments to transition Australia to a low-emissions economy in the future.

This is important certainty for the Australian business community.

The other thing which we need to be very mindful of in this debate is the cost of inaction. We have spoken just now of the consequences of acting, after 12 years, through this Carbon Pollution Reduction Scheme, an emissions trading scheme for the future. The costs of inaction also need to be registered for all those who are mindfully engaged in this debate. First of all, we need to be very clear about the fact of what would happen to the Australian economy were we to see inaction nationally and globally. The Stern review has concluded that, if we fail to act, the overall costs of climate change will be equivalent to losing between five and 20 per cent of global GDP each year, now and into the future. Put that into Australian terms—what would that translate to? A cost of between 2½ thousand dollars and $10,000, in today’s dollars, for every Australian every year. These are significant costs, and that is before we go to the regional costs, both economic and environmental.

The recent Oxford Economics report commissioned by the Great Barrier Reef Foundation finds that climate change related coral bleaching on the Great Barrier Reef may cost $37.7 billion in lost economic value. Furthermore, the Great Barrier Reef alone attracts some two million tourists each year, supporting tourism across the region and generating over $4.9 billion in tourism and employment for around 60,000 people, something for which I know the member for Leichhardt and other members from Queensland are deeply concerned. Without action on climate change, the Garnaut review showed, by 2030 the value of agricultural production in the Murray-Darling Basin would shrink by 12 per cent, and by 49 per cent by 2050. That is why it is essential that we act on climate change also to support the future of agricultural production in our country. More than 90,000 people are employed in agriculture in the Murray-Darling Basin. Their jobs are important, like the jobs of all Australians, those jobs also which are being generated from tourism on the Barrier Reef and those jobs which can be generated by a new, clean, green renewable energy sector as well.

Finally, on cost, can I say this: let none of us underestimate the costs which flow from the increased incidence of extreme weather events which come as a consequence of climate change—whether it is heat waves, drought, hail storms, tropical cyclones or fires. The serious consequences in terms of the human costs and the serious consequence in terms of the cost of insurance: these constitute the costs of inaction, and they are as much a part of the debate as the adjustment costs associated with action. Therefore, this Carbon Pollution Reduction Scheme is on about the business of reducing carbon pollution in Australia. It is about helping cool the planet. It is about how we help our families adjust to higher carbon costs in the future, how we help our industries adjust to higher carbon costs in the future and how we generate the green jobs of the future. I would thank the Leader of the Opposition and the opposition for supporting this legislation in its passage through the parliament. We believe this is legislation in the Australian national interest and in the interests of our kids, our grandkids and the future economy.