MARK'S SPEECH ON THE CARBON TAX REPEAL BILLS

Media Release.

Mark Butler MP.

Shadow Minister for the Environment, Climate Change and Water

Date:  18 November 2013

These Bills are dressed up by the Prime Minister as Bills to terminate the so-called Carbon Tax – were they just that, the Opposition would be in a position to support them.  But they do so much more than simply terminating the Carbon Tax.  And for that reason the Opposition cannot and will not support the Bills without them being substantially amended.

As just a taste of what these Bills would do beyond simply terminating the Carbon Tax – they also remove the legislated cap on carbon pollution, an essential discipline in ensuring that we meet our 2020 target to reduce Australia’s emissions.  The Bills abolish the entire framework for an Emissions Trading Scheme, a scheme which caps and then reduces our carbon pollution while letting business – not the Minister or his bureaucrats here in Canberra – but business work out the cheapest and most effective way to operate within that limit.  I’ll have more to say about the ETS framework later in my remarks.

The Bills also abolish the Climate Change Authority – a statutory body charged with providing strong and independent advice to Government about matters including the Renewable Energy Target as well as caps and targets for carbon pollution or emissions.

The Authority is chaired by former Reserve Bank Governor, Bernie Fraser, with a Board made up of highly esteemed business leaders, economists and scientists, including Australia’s Chief Scientist.

Of course, in this respect the Abbott Government has form.  Two emerging themes with this new Government are, firstly, secrecy – perhaps exemplified in the Immigration portfolio – and, secondly, the shutting down of any strong independent voices.  The Rudd Government’s first action in this area was to ratify the Kyoto Protocol.  This Minister’s debut was to abolish the Climate Commission – a body established to provide the community with digestible information about climate change.  As Members know, there has been an extraordinary community response to this blatant act of censorship.  The community responded by opening their wallets and sending money to allow the Commission to continue their work as the Climate Council, encouraging informed debate about climate change in our community.

But the Climate Change Commission was just the first casualty.  These Bills would also shut down the independent voice of the Authority on the critically important question of targets – extending yet further the emerging theme of this Government to ensure that all advice – to the Parliament and to the Australian community – is managed and controlled by the Prime Minister’s office.  Well, Labor will stand up for strong, independent advice.  We will oppose the Bill that abolishes the Climate Change Authority outright.

And last but not least, these Bills carve into the household assistance package by abolishing tax cuts legislated for households in future years – a blatant breach of the Prime Minister’s promise to retain the package in its entirety.

These Bills are the culmination of one of the most hysterical – and at times downright mendacious – campaigns in modern Australian history.  It was a campaign driven by two forces – the first is what my friend the Member for Grayndler used to describe as the longest dummyspit in Australian political history – the Prime Minister, as he is now, never accepting the fact that he didn’t end up with the keys to the Lodge in 2010 and resolving simply to tear the place up.  And secondly is the triumph of the hard Right in the Liberal Party when the Nick Minchin forces threw their numbers behind the Member for Warringah to defenestrate the Member for Wentworth on the condition that he cross over to climate scepticism – indeed that he renege on the policy that his mentor John Howard had taken to the preceding election – to introduce an Emissions Trading Scheme.

Having thrown John Howard’s policy overboard and reneged on the commitment he had made to the electors as a candidate in the 2007 election, the now Prime Minister released a policy on climate change called “Direct Action”.  Now, even a cursory glance at this policy will reveal that what little action there is in the policy is anything but direct.  Admittedly, it’s a catchy title, but “direct action” would usually conjure thoughts of regulation of emissions standards in power plants or motor vehicles.  This policy does nothing of the sort.  It’s little more than a dressed up slush fund with a fancy name.

After the now Prime Minister dropped Liberal support for a market-based emissions trading scheme, the Member for Wentworth wrote with refreshing frankness in Fairfax that

“any policy that is announced will simply be a con, an environmental figleaf to cover a determination to do nothing.  After all, as Nick Minchin observed, in his view the majority of the Party Room do not believe in human caused global warming at all”.

And that goes straight to the heart of the difference between Labor and the Coalition in this policy area.  Labor accepts the advice of climate scientists that human activity – in particular the burning of fossil fuels and changes in land use – are causing the Earth to get warmer.

Since the defenestration of the Member for Wentworth, a consistent tactic from the new Prime Minister has been to suggest to the Australian community that scientists are divided about climate change. In July 2009, the now Prime Minister said “I am hugely unconvinced by the so-called settled science on climate change”

In October 2009, he famously described the science as “absolute crap”

In March 2010, he said “I don’t believe that the science is settled”

And in March 2011 he suggested “whether carbon dioxide is quite the environmental villain that some people make it out to be is not yet proven”

This approach is not the new Prime Minister’s alone.  It is common among Australia’s climate change sceptic media, as it is in other nations where this debate continues to flare.  And only last week we read of the last Coalition Prime Minister telling a British audience that he preferred to rely on his instinct rather than scientific advice.

To suggest that climate scientists have not reached a settled view about global warming is simply misleading.  Earlier this year, NASA – that notorious hot-bed of alarmist left-wing propaganda – confirmed that 97% of climate scientists who are actively publishing papers agree that human activity is causing global warming.

In September, the 5^th Assessment Report of the Intergovernmental Panel on Climate Change was released.  This Report was completed by hundreds of the world’s leading climate scientists – with 209 Lead Authors and more than 600 contributing authors.  The 5^th Report strengthened the consensus around human caused climate change.  Now, the world’s climate scientists are 95% certain that a process of global warming has been underway for some decades and that its major causes are human activities – in particular, the burning of fossil fuels and changes in land use.

Since pre-industrial times, the concentration of carbon dioxide in the Earth’s atmosphere has increased by 40% with around 500 billion additional tonnes of the gas pumped into the atmosphere over that period  Scientists tell us that this is the highest atmospheric concentration in at least 800,000 years.

The latest report confirms that average global surface temperatures have increased by 0.85% since 1880.  Ocean surface temperatures have also warmed which causes the water to expand, contributing to sea level rise.  The World Meteorological Organisation advises that sea levels are now rising about twice as fast as they did on average across the 20^th century.  The IPCC Report also confirmed acceleration in the overall loss of polar ice which is also contributing to sea level rise – with accelerating loss of the Arctic and Antarctic ice sheets, the loss of about 4% of the Arctic sea ice per decade, and accelerating loss of glacial ice.  The report also confirms an increasing acidification of our oceans as they absorb more of the extra carbon dioxide in the atmosphere.  More acidic oceans pose dangers for a range of marine ecosystems, including coral reefs like the Great Barrier Reef.

The Report reaffirms the need to limit overall global warming to 2ºc above pre-industrial averages.  That has been agreed by all major nations – including China and the US – as the benchmark for international negotiations leading into 2015 – negotiations to which I note the Government hasn’t even bothered to send a Parliamentary Secretary.

The Report also confirms that the number of unusually hot days is increasing, as is the frequency of heatwaves in a number of regions including Australia.  But you don’t need to read the IPCC Report to understand that our climate is changing.

Many communities in the Murray Darling Basin area are still recovering from the worst drought in memory – other parts of Australia remain in drought today.  The last summer was Australia’s hottest on record.  The 12 months to October were the hottest 12 months on record – remarkable outside an El Nino phase.  The latest State of the Climate report from CSIRO and the Bureau of Meteorology re-states the scientific advice that the number of hot days in Australia will increase as well as advising that droughts and intense cyclones will become more common.

During the recent bushfires in and around the Blue Mountains, the Government got itself involved in an unseemly slanging match over a connection between fires and changing climate.  The Minister confessed to using Wikipedia as a primary research tool, the Prime Minister accused a UN Official of talking through her hat and, last week, former Prime Minister Howard chimed in with the very helpful observation that there were extensive bushfires in Victoria in 1851.

It seems pretty obvious to me that no-one can credibly draw a direct casual connection between a single event and climate change.  As the Minister’s extensive Wikipedia research revealed, there have indeed been fires in Australia for a very long time.  And the direct cause is usually the action of an idiot lighting the fire with factors like hazard reduction, planning and such like influencing its extent.  But weather conditions influence the level of risk and you don’t need to go to Wikipedia to find advice that global warming is increasing the underlying risk of events like a bushfire occurring.  The Minister could have gone to his own Department’s website to find that advice – or the CSIRO and BOM’s latest State of the Climate Report, or the Climate Commission’s advice – or even the Country Fire Authority in the Minister’s own State of Victoria.

The Government simply over-reacted and mishandled a complex and sensitive matter.  And the Prime Minister again encouraged the impression that he wilfully turns a blind eye to the best available scientific advice in this area.

In his 2013 State of the Union, President Obama dealt with this debate and said

“Now it’s true that no single event makes a trend, but the fact is the 12 hottest years on record have all come in the last 15.  Heatwaves, droughts, wildfires, floods all are now more frequent and more intense.  We can choose to believe that super-storm Sandy and the most severe drought in decades and the worst wildfires that some states have ever seen were all just a freak coincidence.  Or we can choose to believe in the overwhelming judgment of science and act before it’s too late”

There is now a point of agreement between Australia’s two major parties – that the Carbon Tax should be terminated as soon as is practicable.  But there is a profound disagreement about what replaces it as the centrepiece of Australia’s action on climate change.  These are not easy questions to answer.  As the OECD Secretary General said a few weeks ago “…it would be hard to imagine a more complex risk management issue than that posed by climate change”.

The different paths before us are, on the one hand, an emissions trading scheme and, on the other, the Liberal Party’s so-called “Direct Action” policy.

The Opposition will move amendments to those Bills to ensure that the Carbon Tax is replaced by an emissions trading scheme or ETS.  The ETS model has been recognised around the world as the cheapest and most effective way to drive down carbon pollution.

It is the most effective way because its centrepiece is a legislated cap on carbon pollution.  The annual cap provides the discipline to ensure that Australia reaches its target for reducing carbon pollution or emissions by 2020 and beyond.

And it’s the cheapest way to achieve that objective because it creates a genuine market.  The ability to trade pollution permits means that business works out the cheapest way to operate within the national pollution cap.

One of the more recent of a long list of falsehoods argued by the Liberal Party is that an ETS and a Carbon Tax are the same thing.  Now those arguing this case are either deliberately trying to mislead the community or they simply don’t understand the basic economics of the two models.

A carbon tax seeks to change behaviour by imposing a price signal without any other legal discipline on the behaviour – in this case carbon pollution.  An ETS, on the other hand, changes behaviour through the discipline of a legislated cap on pollution, and then lets business work out how to operate.  The effective price on a tonne of carbon pollution under an ETS would be only one quarter of the current Carbon Tax.

The ETS is by far and away the most common model around the world employed to reduce carbon pollution.  Some nations do this at a national level, while others trade at a State or city level.  Some of Australia’s oldest trading partners have a national ETS – the UK and France, for example, as well as Germany, the world’s third largest exporter, poised to move into second place this year.  In North America, a number of US and Canadian States have an ETS, including California, the 9^th largest economy in the world.

In our own region, China this year started seven pilot ETS schemes in regions covering more than 200 million people with the aim of having a national trading scheme in place at the end of this decade.  As the head of the Australian Industry Group, Innes Willox, said in June “these pilots show that even nominal communists recognise that cutting emissions at least cost requires the power of market mechanisms”.  Following this move by China, our two nations agreed to set up a Joint Carbon Trading Experts Group to reflect our shared commitment to serious action on climate change.

As part of their campaign of fear and hysteria, the Liberal Party has regularly pontificated that the world’s two big polluters won’t take any serious action to reduce their carbon pollution, so neither should we.  The Minister has talked about the inexorable rise in China’s coal consumption up to 7 billion tons per annum.  But China is putting in place a cap on coal consumption in the energy sector of around 4 billion tons as well as consideration of a broader national emissions cap in 2015.

While President Obama continues to struggle to see an ETS scheme pass the Congress, the US has in place a target to reduce carbon pollution by 17% by 2020, compared to our target of 5%.  To achieve that, the President is deploying regulations of power plants and the transport sector.  And South Korea, Australia’s third largest export market, begins an ETS the year after next.

Although former Prime Minister Howard last week tried to shrug it off as an exercise in political opportunism, it must be remembered that the Liberal Party took an ETS policy to the 2007 election. Back in 2008, the now Minister gushed that

“Perhaps the most important domestic policy was the decision of the Howard Government that Australia will implement a national carbon trading scheme”

The Member for Sturt was equally enthusiastic when he said in 2009

“Let’s not forget it was the Liberal Party that first proposed an emissions trading scheme when we were in Government.  The idea that somehow the Liberal Party is opposed to an emissions trading scheme is quite frankly ludicrous”.

Well those opposite might have done an about face for political reasons, but the ETS model is still recognised as the cheapest and most effective way to tackle climate change.  The OECD said precisely that only last week – that hotbed of left wing environmental fanatics, the OECD.  Two weeks ago, a survey of Australian business and academic economists showed that 86% favoured an ETS.  In August, a survey by AECOM of Australian business showed an overwhelming preference for an ETS, and only 7% support for the Liberal Party’s policy.

Now if these Bills pass unamended, an ETS in Australia disappears – the Prime Minister truly gets his way in throwing the baby out with the bathwater – no legislated cap on carbon pollution, no market mechanism for business to tap into.  All Australia is left with is the so called Direct Action Policy.

As the Member for Wentworth foresaw, this policy is nothing more than an environmental figleaf to cover up the fact that this is a Party that has no commitment to taking action to mitigate climate change.  It’s a policy that was devised at a time when climate scepticism had swept through the Liberal Party like a virus – and, while the world is moving on, Australia is at risk of being stuck with it.

The first point to make about the Liberal policy is that it is unique.  No-one else has a policy like this on climate change.  It’s true that a nation like the US is directly regulating the electricity and transport sector emissions, but President Obama is only doing that he says because the US Congress won’t pass an ETS.  And that sort of direct action is a far cry from the Carbon Slush Fund that lies at the centre of this Government’s plans.

The most fundamental failing of the Liberal policy is that it doesn’t include a legal limit or “cap” on carbon pollution.  It relegates our international commitments on pollution reduction to a mere “aspiration”.  Indeed, during the election campaign, Tony Abbott confirmed that if his funding was not adequate to reach the target (as most experts expect will be the case), then the target is dispensable.

The other major failing of “Direct Action” is its reliance on highly contested ideas to reduce carbon pollution – in particular, soil carbon technology which Greg Hunt describes as their “major plank”.  The policy presumes that soil carbon can deliver up to 85m tonnes of reduction per year at $10 per tonne.  Since its release, a University of WA study found the cost to be more like $80 per tonne and Mr Hunt’s own Department estimates the technology can only deliver 1/20^th of the claimed reductions.

Experts including CSIRO has similarly rejected the assumptions made around reforestation.

More recently, the Minister has presented his “Emissions Reduction Fund” as the “centrepiece” of their climate change policy.  He describes this as a reverse auction, where Government will pay bidders for the lowest-cost abatement idea presented.  The level of detail about the ERF is laughable.  This “Carbon Slush Fund” will end up paying polluters for highly speculative ideas that might never actually deliver.

The Minister compares the ERF to water purchasing arrangements, yet ignores the fact that very precise, existing water entitlements are offered up under that program with delivery happening then and there.  Under the ERF, it might be years before the bidder can actually demonstrate delivery, and at what cost.

Also, it remains unclear whether the ERF will pay polluters for changes they were intending to make anyway and whether pollution reduction will need to be permanent, measurable and internationally recognised.

In recent times, a number of Independent reports have found that the levels of reduction in carbon pollution required of Direct Action will cost several billion dollars more than suggested by the Coalition.

Given that the Liberal policy involves the Government handing billions of taxpayer dollars to polluters, the overall cost will rise in line with the cost polluters claim to reduce each tonne of carbon pollution.  Treasury has estimated a cost of $80 per tonne by 2020.  With a reduction target that year of 150 million tonnes, the total cost to the taxpayer then will be $12 billion or $1200 for each of Australia’s 10 million households.

This huge cost is increased by the Coalition’s refusal to let Australian business purchase units from overseas, a point made forcefully by the Australian Industry Group.

For these reasons and more, it’s little surprise that in more than 3 years, the Coalition has been unable to present a single credible climate scientist or economist who supports the policy.  Equally, the Minister has been unable to point to a single country which is adopting the same approach.  Other nations are generally introducing ETS schemes or using direct regulation to impose emission standards on sectors like electricity and transport.

Indeed, during the 2013 campaign, the Minister verballed two Nobel laureates as supporters of the Liberal policy who – when followed up for comment by the media – both indicated they’d never heard of the policy or spoken to Mr Hunt.

Anyone who has seriously examined the so-called Direct Action policy has found that it will cost households more and be much less effective at cutting carbon pollution.

At the same time, the Prime Minister is confronted by the inevitable collision between the hysteria of his campaign over the past 3 years and the realities of being in Government.  It is now clear that his overblown promises about relief on power prices will likely come to nought.  The takeaway message from the energy sector, the grocery sector and big business in recent weeks was “don’t hold your breath for any prices to come down” if these Bills pass.

Three years on, it’s crystal clear that the Liberal policy won’t work.  Equally, it’s clear that Labor is willing to co-operate in terminating the Carbon Tax.  The obvious way forward for Australian business and households is for the Prime Minister to swallow his pride and for the Parliament to work together on an Emissions Trading Scheme.

The final points I’d like to address concern the Government’s winding back of Australia’s commitment to renewable energy contained in these Bills.

The growth of renewable energy in Australia is an out and out success story. During our term in Government, wind energy trebled, jobs in the sector more than doubled to over 24,000, and the number of households with PV solar panels skyrocketed from around 7,000 to more than 1 million. In 2012/13, renewables increased their share of the National Electricity Market by 25% in just one year!

While the Liberal Party has paid lip service to our Renewable Energy Target of 20% by 2020, they are now crab-walking away from it. The Prime Minister’s recent remarks on Alan Jones revealed that he’s open to lobbying from old-style business to winding back wind and solar energy development

These Bills abolish the Clean Energy Finance Corporation, a body making loans on commercial terms to help new, ambitious renewable projects get a foothold; projects like the Macarthur Wind Farm, the largest in the Southern Hemisphere. The Bills, without any prior notice, also strip ARENA - the Renewable Energy Agency – of almost half a billion dollars. This is an Agency that used to enjoy bipartisan support and which provides critical start-up funding to emerging renewable technology – like the largest PV solar farm in the Southern Hemisphere announced earlier this year.

In conclusion, I confirm that the Opposition will be moving amendments in due course to the principal Bill which, while supporting the termination of the Carbon Tax on 30 June 2014, replaces it with an Emissions Trading Scheme. I also confirm that the Opposition – even if those amendments are carried – will not support the abolition of the Climate Change Authority or the Clean Energy Finance Corporation; nor will we support legislation to abolish the tax cuts promised as part of the Household Assistance Package or cuts to the ARENA budget.

And finally, I move as a second reading amendment the following proposition

I thank the House