Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Climate Change and Energy Efficiency.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for Melbourne Ports will resume his place. I have received correspondence asking me whether I have a vendetta against the member for Sturt. The member for Sturt will attempt to sit there quietly.

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Mr Hockey interjecting

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for North Sydney is not assisting, really. I understand what that would mean.

Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Climate Change and Energy Efficiency. What does recent economic research into carbon prices within our competitor economies indicate? Why, Minister, is a carbon price important for business certainty?

Greg Combet (Charlton, Australian Labor Party, Minister for Climate Change and Energy Efficiency) Share this | Link to this | Hansard source

I thank the member for Melbourne Ports for his question. Today a report has been released by the Climate Institute. It is a report prepared by an organisation known as Vivid Economics. It is a well-respected organisation from the United Kingdom which does research into climate change economic issues. The report that has been released today is an analysis of the implicit or shadow carbon prices that operate in a number of key economies with which Australia trades. The study is in fact one of the first efforts, I think, that has been made to quantify the costs of policies to reduce emissions or to establish what shadow carbon prices there are in particular economies, including countries as important to Australia as Japan, the United Kingdom itself, the USA, China and South Korea.

The Vivid Economics report has found that countries around the world are, of course, already taking steps to reduce their carbon pollution and thereby moving to cleaner energy sources and effectively having a carbon price in their economies. Importantly, it indicates that countries with which Australia trades, like China and the United States, already have implicit carbon prices within their electricity sectors. This is a matter that is of interest to the multiparty climate change committee that the government has established to consider the issue of the introduction of a carbon price, and a matter that the government has responded to in response to a request by the member for New England to do an independent analysis of what carbon prices would be operating with some of our major trading partners.

In our economy, a carbon price not only will create an incentive to reduce pollution but will also provide certainty for investment by the business community. It will also increase this country’s long-term competitiveness, because it will drive investment in clean energy and it will make Australia an attractive investment place in which companies will do business. The energy company AGL, one of our major companies operating in the energy industry, estimates that uncertainty caused by the delay in implementing a carbon price in our economy could cost consumers up to $2 billion a year, or around $60 per household, in higher electricity prices in 2020. The shadow Treasurer shakes his head. I will explain: it is because investment in new baseload electricity generation is being deferred because of the uncertainty generated by the lack of a carbon price in our economy.

Opposition Members:

Opposition members interjecting—

Greg Combet (Charlton, Australian Labor Party, Minister for Climate Change and Energy Efficiency) Share this | Link to this | Hansard source

We have further commentary from the other side. It is not rubbish. If you engage with the major players in the energy sector they will tell you that is the case and they will tell you that is why they support the introduction of a carbon price into our economy. The interjections only serve to emphasise how out of touch those opposite are with mainstream business thinking in this matter. They are out of touch with developments that are going on internationally and their position in opposing a carbon price in this economy is economically irresponsible.