Mark Butler, Subject: Direct Action

TRANSCRIPT OF INTERVIEW ON ABC'S INSIDERS

Date:  02 November 2014

BARRIE CASSIDY: That is the Sunday papers. Now straight to our program guest, it is the Shadow Minister for the Environment Mark Butler who joins us from Adelaide. Good morning, welcome. 

MARK BUTLER: Good morning, Barrie. 

CASSIDY: Whatever you might think of Direct Action, the Government this week finally got through the Parliament support for a policy that it took to two elections. 

BUTLER: Well, it did. 

CASSIDY: Well, go on. 

BUTLER: It did and Greg Hunt is patting himself on the back for that but the question is whether it is good for the country. The question is whether it is going to work in terms of bringing down carbon pollution. For the 4 and a half or five years this policy has been in the political marketplace, there has not been one single credible economist or climate scientist or business organisation that has said this is a good use of taxpayer funds that will achieve the stated objective, which is to reduce carbon pollution. So, Greg Hunt might be very happy with himself but at the end of the day this is not a good policy for Australia. 

CASSIDY: What it might bring, though, is certainty to the table because, by contrast, there was the Rudd policy, it was modified by Julia Gillard and modified again by Kevin Rudd. This is a policy Greg Hunt, the Minister, says could be around for 20, 30 years? 

BUTLER: To quote Malcolm Turnbull, that would be a recipe for fiscal recklessness on a grand scale. There has been report after report on this. I will quote two. Reputex, the leading carbon mark analyst and a gentle supporter of Direct Action if anything, said this week that Direct Action, the deal done by Clive Palmer and Tony Abbott this week, will only achieve about 20 or 30 per cent of the carbon pollution reductions we need to get just to the 5 per cent target in 2020. Ken Henry endorsed Ross Garnaut's estimates you would have to spend $4 billion or $5 billion per year to get to the 5 per cent target. An additional $20 billion between now and 2019. This is a colossal waste of taxpayer funds and it is not going to achieve meaningful reduction in carbon pollution. 

CASSIDY: The extent to which it reduces emissions is difficult to judge. What if it does achieve the 5 per cent reduction and it demonstrates incentives work, what becomes of the market-based alternatives? 

BUTLER: Well, we are in this curious position where Tony Abbott, the leader of the Liberal Party, is arguing you can't have a market in this area, you can't have businesses, for example, participate in a global market in carbon pollution reduction; you have to trust the Minister, trust Canberra, to work out the best way to reduce our carbon pollution reduction. Notwithstanding the number of times Tony Abbott and Greg Hunt stand up, put their hand on their heart and say "We are going to achieve the 5 per cent reduction.” No-one else believes it. No-one else has said we have a chance under this policy to achieve a 5 per cent reduction, let alone the more ambitious discussions that will be the subject at international negotiations next year. 

CASSIDY: Probably, at the very least, Australia is no longer out ahead of the rest of the world but Australia is not carrying a disproportionate burden? 

BUTLER: Tony Abbott certainly achieved that. We are not ahead of the rest of the world. While the rest of the world is moving forward, particularly leading countries like the United States and China but so many of our other trading partners as well. Tony Abbott has made Australia the first nation to completely dismantle a meaningful climate change policy and start to put his country backwards. 

CASSIDY: By sticking with an ETS, with Labor sticking with an ETS, doesn't the Coalition Government have a very easy argument at the next election that one thing they can guarantee are cheaper power prices? 

BUTLER: Well we'll have to make that argument. We'll have to make the argument about why the only serious way to deal with climate change is to put an economy-wide cap on carbon pollution, a legal limit on carbon pollution that reduces over time in accordance with our international obligations. Then we let business work out the cheapest and most effective way to operate. That is the sort of scheme you see in so many different parts of the world now but particularly in our own region. In China, there are seven schemes covering a quarter of a billion people, moving to a national trading scheme soon. South Korea our third largest export partner is starting an Emissions Trading Scheme on 1 January next year. They already operate in so many of our oldest trading partners in the Northern Hemisphere. Around the world, by business economists, other economists, climate scientists and the like, a cap on carbon pollution that lets business work out the cheapest and most effective way to operate is almost universally regarded as the most effective way to deal with climate change. 

CASSIDY: Business sorts it out but electricity prices will be more expensive under Labor's policy? 

BUTLER: That's not necessarily the case. Over the next 12 to 24 months we will be working with businesses, other stake holders, keeping a very close eye on international negotiations to work out quite what we should be doing about the detail of the Emissions Trading Scheme, whether we link with other parts of the world, for example, as so many business organisations stress we should do, but Tony Abbott appears to resist. A lot of that detail has to be worked through but you can't pretend Direct Action is a free policy. There are billions and billions of taxpayer dollars now being thrown at companies to reduce their carbon pollution. That money doesn't come out of thin air. It is money raised from ordinary taxpayers that now Tony Abbott is handing over to Australia's big polluters. 

CASSIDY: Were you surprised, given that Clive Palmer once appeared at a news conference with Al Gore, were you surprised when he cut this deal with the Government? Did you see that coming? 

BUTLER: Clive Palmer never ceases to surprise me in this policy area. He had said consistently for months and months that Direct Action was a dog of a policy. He was no orphan there. Everyone says, except Greg Hunt and Tony Abbott, this is a policy that won't work. All he appears to have achieved for the backflip is a study, as Greg Hunt said, whether there are Emissions Trading Schemes around the world and how they work. You could have given that study to a first-year high school student who had access to the Internet. This is work done all the time to track what's happening around the world on ETS schemes. Why Clive Palmer fell for this trick is beyond me. 

CASSIDY: He effectively dumped his insistence on the ETS, he wanted it to lie dormant and picked up down the track. If there was a mug in the game, it wasn't Tony Abbott or Greg Hunt. 

BUTLER: You have seen Liberal Party MPs, a Liberal Party Minister yesterday saying Clive Palmer is a grandstander but they think obviously they got him on this one. It is hard to argue at that when you look at the details of the deal he agreed to. 

CASSIDY: On Renewable Energy Targets, you are still in conversation with the Government on that, 20 per cent, now effectively 27 per cent because of reduced power usage, will you meet the Government halfway on that? 

BUTLER: We will talk constructively with the Government. Implicit in your question is this idea 20 per cent was the glass ceiling, we were never to go above that. Our policy was always very clear. There would be at least 20 per cent of electricity delivered from renewable sources by 2020. Because of a fall in demand against what we thought would happen, on the current projections, we are going to get more than 20 per cent. That's not a failure of policy. That was always a possible outcome. What the real objective here is to get renewable energy back on the rails. By the middle of last year, there were four attractive places to invest in renewable energy according to the global index on these things. US, China, Germany and there was Australia. We have, since the election of the Abbott Government, plummeted on that table. Renewable energy invent was running to billion - investment was running to billions of dollars last year has completely frozen. The banks, the investors and the companies themselves tell us the only way to get investment back on track is with an agreement between the two major parties of government. Not what Clive Palmer says or the Greens party. They are looking to what the alternative parties of government will say because these investments endure for 15, 20, 25 years. 

CASSIDY: If you are going to negotiate, though, at some point compromise, surely you have to accept at some stage the fact power usage is reducing, is in decline, is at least in part relevant? 

BUTLER: Of course, it is a factor on the table but I wanted to deal with the implication in your question we should somehow target 20 per cent as a glass ceiling. We don't accept that. I've made that clear publicly and to Ian Macfarlane their projection of a 40 per cent cut, which is their so-called real 20 per cent target, is not something we will be accepting. 

CASSIDY: Mark Butler, thanks for your time this morning. 

BUTLER: Thanks very much, Barrie.