Senate debates

Monday, 30 November 2009

Carbon Pollution Reduction Scheme Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009 [No. 2]; Australian Climate Change Regulatory Authority Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (Charges — Customs) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (Charges — Excise) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (Charges — General) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) (Consequential Amendments) Bill 2009 [No. 2]; Excise Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009 [No. 2]; Customs Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme Amendment (Household Assistance) Bill 2009 [No. 2]

In Committee

6:05 pm

Photo of Penny WongPenny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Hansard source

I note that your party, before the last election, did not and I read from the coalition government’s election policy ‘to establish an emissions trading scheme, not put in place a carbon tax’. I think I have made it clear on numerous times in this place why we believe this is a more efficient mechanism than a tax. If you want a certain environmental outcome then a cap-and-trade system provides you with more certainty because you can identify the cap. If you put in place a carbon tax you have to try and estimate how much of a tax, and on what sectors you would need to impose that amount of tax, in order to achieve that environmental outcome. It may give price certainty but it does not give an environmental certainty.

I also make the point that if anybody in this chamber believes that just because you have a carbon tax that is going to avoid all the difficult policy decisions that are made on how you move to a lower carbon economy, it will not; it will just manifest in different arguments. One of the issues has been how we treat the emissions-intensive trade-exposed sector. They have said to the government and to the opposition, ‘We would be facing a carbon price’—put, insert or interpolate the words ‘carbon tax’ for the purposes of this discussion, Senator Eggleston—‘and we want assistance to meet that’. So there would still be the argument for assistance, exemption or some other form of relief from the same sectors of the economy with whom the government and opposition have been consulting about how you manage the introduction of such a tax.

The primary issue is that we believe that cap-and trade-systems, such as the one before the chamber and the one you committed to at the last election, are a more efficient mechanism because they encourage businesses to find their best way of reducing their emissions. It is not like the government is saying, ‘We in the government know best and we want you to do it this way’. We are saying: ‘We are going to put a price on carbon. That is a cost that reflects the cost of climate change but you can find a way of reducing that cost by becoming more efficient as you know best in your business’. We think a properly regulated and structured market mechanism is more efficient. If I may hazard a suggestion, that is also why major economies of the world, including the G8 economies, have said that these schemes have demonstrated their effectiveness and are a good way to implement the means to reduce emissions, particularly in developed economies.

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