Annette Hurley (SA, Australian Labor Party) Share this | Hansard source

Both the standing and select committees reported on both the original CPRS legislation and the changes that were announced by the government on 4 May 2009. The CPRS legislation was the result of a very long process of analysis and consultation by successive federal parliaments and governments. The Senate Standing Committee on Industry, Science and Technology started examining the issue over two decades ago. Its report to the Howard government in 1991 concluded:

... the committee supports concerted action to reduce greenhouse gas emissions ... a target of 20% reductions by 2005 ... it is now time for action. That action must be speedy and must be a practical solution in the short term. Setting up committees to further examine greenhouse issues or putting out press releases imploring the community to be more energy conscious does not constitute action that will result in sufficiently significant reductions of greenhouse gas emissions.

They are very strong words indeed from that standing committee over two decades ago. Unfortunately they were not acted upon.

On top of the government’s exhaustive public consultation process, including the green paper, the white paper and exposure draft legislation, the Senate has had extensive opportunity to scrutinise the CPRS. The Senate Economics Committee inquiry into the exposure draft bills held seven days of public hearings around the country, the Senate Select Committee on Fuel and Energy has had 12 days of public hearings around the country, the Senate Select Committee on Climate Policy has held 10 days of public hearings around the country and the Senate Economics Legislation Committee inquiry into the legislation held two days of public hearings. After all this, many witnesses indicated to us that they were inquiried out.

The parliament has held 13 committee inquiries to look at how we are going to deal with the challenge of climate change, and there have been more than 787 appearances before these committees. Despite this, we are still faced with the absurd proposition from those opposite that we should delay taking action yet again. This follows a moving feast of positions by the opposition on the release their targets, first after Garnaut’s report, then after the Treasury modelling, then after the white paper, then after the Pearce report they commissioned from the Centre for International Economics, then after the select committee inquiry and then after yet another inquiry from the Productivity Commission. And now they are saying they will make a decision after Copenhagen and after the US laws are finalised. The reality is that they have no united position and so will continue to prevaricate and delay rather than working cooperatively to at last move forward on this critical issue.

It has been increasingly clear that the developing countries are not able to continue using resources at the same rate as in the past, and that the current pollution rate will be unsustainable. This is particularly so as developing nations such as China and India experience rapid growth and utilise resources themselves. There are many countries in Asia, South America and Africa that would also look to be on a growth trajectory. It is therefore important that developed nations take a responsible position.

The CPRS has been designed to enable Australia to effectively make a transition over time to a low-pollution economy. The scheme will include all greenhouse gases under the Kyoto protocol and will include around 75 per cent of Australian emissions. According to estimates in the white paper, companies with mandatory obligations under this scheme comprise approximately 1,000 businesses. The CPRS builds the cost of climate change into all our decisions by attaching a cost to pollution for the first time. It puts a cap on our pollution and creates the financial incentives to find cleaner ways of doing business.

The scheme is also backed up by robust, long-term modelling by the Australian Treasury. This modelling concluded that responsible action now is less expensive than delayed action later. This is a critical point, since it is a significant change to our economy and it is important to achieve as smooth a transition as possible for the sake of our economy and the companies and people who are part of it. The modelling concluded that coordinated global action reduces the economic cost of achieving environmental objectives, reduces distortions in trade-exposed sectors and provides insurance against climate change uncertainty. The modelling showed that we can still reduce our emissions while continuing to grow our economy—it was unequivocal that we would continue to grow the economy even with the introduction of the CPRS—and that acting now to reduce emissions will be cheaper than acting later or, worse, not acting at all.

Crucially, the modelling suggests that real GNP per capita growth slows by one-tenth of one per cent per year as a result of putting a price on emissions. With our economy as it is, we should be able to absorb that slowing of growth. This is one-fifth of the cost of population ageing. Moreover, this does not take into account the costs avoided by successful global action on climate change.

Throughout the inquiries we heard mounting evidence from peak industry groups, the financial and investment sector, international law firms and the renewable energy sector that failure to pass the legislation would have an adverse effect on certainty for business in making capital expenditure decisions. The committee heard that large companies impacted by the scheme have been preparing for its introduction for some time—keeping in mind that the reduction of greenhouse gas emissions has been formally recommended since 1991. Australian businesses know that climate regulation is inevitable, but ongoing uncertainty about what form the legislation will take is imposing real costs today. Uncertainty is the enemy of investment and, therefore, job creation. We need to give investors a clear signal so they can make investment decisions that factor in a carbon price, which will be essential to reducing our pollution.

A crucial aspect of the CPRS legislation and other government policies is that funding will be given to renewable energy sources and industries that will thrive under the new regime. Critical for Australia is carbon capture and storage and geosequestration. These are fledgling technologies that are yet to be fully proven. Without funding and the certainty of a carbon cost, the chances are that these technologies will either never be proved or be proved slowly. It is vitally important for our coal and energy industries that these technologies are developed.

The passing of the CPRS legislation is widely supported by peak industry, environmental and social welfare organisations, including the Australian Industry Group, the World Wildlife Fund and the Australian Council of Social Service. Whilst not all will agree with every aspect of the proposed legislation, there is overwhelming recognition of the need to support the legislation, establish the framework for the operation of the scheme, secure investment certainty and place ourselves in a strong position for the international negotiations in Copenhagen—that is, there is no positive economic, environmental or social value in further delay.

It is unfortunate that those opposite have yet again turned their back on this reality despite the commitment of the previous government to introduce an emissions trading scheme. However, it is not just the Labor Party and the Liberal Party that promised to introduce emissions trading. Family First went to the election with a commitment to introduce emissions trading, Senator Xenophon has made it clear that he believes we need to act on climate change, and it goes without saying that the Greens have campaigned on climate change for years. It is difficult, in that context, to understand why they would block laws that would reduce Australia’s carbon pollution by up to 25 per cent. It is baffling to me that some groups choose to stand on an elevated pedestal rather than put in place a scheme that will begin to make a difference.

Without the CPRS in place Australia would need to adopt other measures to meet the targets to which it will agree at Copenhagen. Business unfriendly regulatory measures would raise the cost of reducing Australia’s emissions, and those costs will be passed on to all Australians through higher prices and lower standards of living. The Senate Standing Committee on Economics concluded that the proposed alternatives are a distant second best and much more costly. The report therefore concludes that now is the time for responsible action and that further delays can only lead to higher costs both for the environment and our long-term prosperity.

I would like to thank the secretariat, particularly the secretary John Hawkins, who performed that role for both the standing and select committees. It was a busy and very demanding role. Thanks also to Maya Stewart-Fox, who spent some time with the secretariat as a secondee from the Department of Climate Change. Thanks also to the many submitters and witnesses, especially officers from the Department of Climate Change and from Treasury—and, in particular, Meghan Quinn, who took committee members painstakingly through the economic modelling of the CPRS on many occasions.