Tuesday, 9 February 2010
Questions without Notice
Emissions Trading Scheme
My question is to the Minister for Defence Personnel, Materiel and Science and Minister Assisting the Minister for Climate Change. What is the most efficient and cost-effective way to take action on climate change?
I thank the member for Lindsay for his question. The most efficient and the most cost-effective way to combat climate change is to implement an emissions trading scheme. It is demonstrably the sound economic approach to reducing emissions, and that is the government’s policy. In contrast, the coalition’s policy will not work. The Department of Climate Change, of course, has modelled that under their policy emissions will rise by 13 per cent over 2000 levels by 2020. In addition to that, we know that their policy will cost more. The scheme will have a greater fiscal impact than they have stated. In addition, we know that taxpayers will pay, not the emitters of carbon pollution, and all the costs are going to be on the budget. It is going to put pressure on to force up taxes.
On that front, we know that their policy is not funded. But now we are learning even more from other analyses of their policy. This is what Mr David Pearce, the director of the Centre for International Economics who last year conducted a review of greenhouse policy for the coalition, had to say. It was reported in the Financial Review yesterday:
… the apparent simplicity of the coalition plan would soon disappear if it were ever implemented … The cost of the scheme could also rise significantly once details such as penalties and assignment of risk were taken into account …
So an expert that the coalition have relied upon in the climate change policy area is saying that their plan is too complex, it is incomplete and the costs will go up. Yesterday, in addition, as the Prime Minister just adverted to, Senator Joyce again was out there saying that business will be subject to unspecified penalties, but he has no idea what the penalties will be, how they will be applied or who is going to be liable for them, and no-one in the business community has any idea whatsoever what costs they are going to have to meet. Talk about business uncertainty! It is a policy for chaos.
Just before question time, a fresh analysis of coalition policy was issued by Bloomberg New Energy Finance. They have done an analysis of the opposition policy. They have estimated that the opposition climate plan ‘would result in an average carbon price of $64 per tonne over four years’, compared to a carbon price under the Carbon Pollution Reduction Scheme of only $14 a tonne. Part of their reasoning for that analysis, which is quite a stunning assessment of the cost of their policy, is that the CPRS will be more cost effective because it is a market based mechanism. Is it any wonder the business community is running away from you? You are creating uncertainty and cost, and it will affect investment and jobs.
Mr Page from the Energy Supply Association of Australia said this last Friday of the Leader of the Opposition’s policy:
We are still not quite sure how an investor in new generation would make a decision about what technology and what fuel source to use, but I can tell you one thing—they will not be thinking about algae fired power stations like you are.
The business community is being left with anticipated cost increases and tremendous burdens, and it will have the effect of deferring investment. As the Prime Minister said, these costs will be passed through in higher prices, and yet from the hypocrites that the opposition are there is no compensation and no assistance for pensioners and households to meet those increased costs.
Could there be a greater hypocrisy than the member for Menzies rising yesterday out of feigned concern for a maritime worker facing rising costs of living? The entirety of their attack is totally phoney. Their position is phoney. They will be putting up costs and there is no assistance for households and consumers to meet it. The only person on that side of the House in recent times to stand up, say what is right and say what is in the national interest, to his credit, was the member for Wentworth in his address yesterday to the parliament on the CPRS legislation. This is what he had to say:
In short, having the government pay for emissions abatement, as opposed to the polluting industries themselves, is a slippery slope which can only result in higher taxes …
And that is an accurate observation of your policy. The member for Wentworth went on to say this in referring to the CPRS legislation:
This legislation is the only policy on offer which can credibly enable us to meet our commitment to a five per cent cut to emissions by 2020 …
I would like to acknowledge the contribution by the member for Wentworth and sincerely so because he stood up under a lot of pressure. It cost him his job as Leader of the Opposition. He was taken out because of his stance, his respect for the science and his acceptance that the best way to reduce emissions in an economy is an emissions trading scheme. The new Leader of the Opposition would do well to take a leaf out of his booklet.