Greg Combet

This  text formed the basis of a speech today by climate change minister Greg Combet at the Law School at the University of Sydney

28 July 2011 – It is a great honour to be here at the Sydney University Law School this morning to release the exposure draft of the Gillard government’s Clean Energy Future legislation.  At one level, it is always a pleasure for graduates to return to their alma mater.  At another level, there is something entirely appropriate about releasing a legislation exposure draft at a Law School.  For it is legislation that both delivers and gives effect to policy.

Government is fundamentally concerned with policy.  Parliament is fundamentally concerned with legislation.  And as policy becomes law, Government delivers to the community the benefits of soundly constructed policy.

Soundly constructed policy is exactly what the Government’s Clean Energy Future legislation will deliver.  At its heart is a carbon price that will cut carbon pollution and help us build a clean energy economy.

On the 10th of July, Prime Minister Julia Gillard announced the Government’s carbon pricing policy.  This was an historic moment in Australia’s economic history.  The Prime Minister’s announcement formalised the decoupling of prosperity from pollution.

When one considers that the Australian economy has prospered on the back of high levels of environmental pollution for more than 150 years, the decision to separate economic growth from long-term damage to the environment marks the beginning of a fundamental economic transformation.  This economic transformation is on a par with the decisions taken by the Hawke and Keating governments to float the Australian dollar and to introduce major tariff reforms.

Australia’s current prosperity is a direct result of the decisions taken back in the early to mid-80s.  Many of you will be too young to recall that those decisions were greeted with dire predictions of economic collapse by various parts of commerce and industry.  But the sky did not fall in.  Rather, Australia has gone on to enjoy an unprecedented period of economic growth: our standard of living has risen; disposable incomes have risen; and Australia is generally the envy of the industrial world.

You would all be aware of the noise that surrounds the current debate.  There are those who are doing a splendid impersonation of Chicken Little, rushing from place to place creating alarm, dishing out dire warnings of imminent economic collapse, talking the economy down, and generally warning that the sky will fall in.

But it won’t.

What the Prime Minister has announced will set the stage for the next phase of economic development, as Australia moves to new and clean sources of energy to drive our economy.  This new phase of development will harness innovation and new technologies to create greater output more efficiently (which means at lower cost) and more effectively (which means cutting pollution).

The Evidence of Science

It is important to note that the Government’s clean energy future policy is a classic example of evidence-based policy.  In this case, the evidence is the science – another feature of the current debate that has also sadly attracted an extraordinary amount of mindless opposition.

Climate change is on the national and international agenda because of the strong scientific consensus.

To help promote the science of climate change within the community the Government established the Climate Commission, which recently delivered ‘The Critical Decade’ – a concise assessment of the latest climate change science.

The key messages of the report are clear:

  • There is no doubt that the climate is changing. The evidence is overwhelming and clear.
  • It is beyond reasonable doubt that human activities – the burning of fossil fuels and deforestation – are triggering the changes we are witnessing in the global climate.
  • With less than 1 degree of warming, the impacts of climate change are already being felt in Australia and around the world;
  • The risks of future climate change – to our economy, society and environment – are serious and grow rapidly with each further increase in temperature;
  • Minimising risks requires deep and ongoing transformational shifts to reduce greenhouse gas emissions;
  • We need to begin now to make these transformations; to decarbonise our economy and move to clean energy sources.

This is the critical decade for action.

I do not accept this information with any sense of glee.   But failure to act on the scientific evidence is not only a failure of courage: it is a betrayal of the rights and opportunities of future generations.  Put at its simplest, our grandchildren and their grandchildren deserve a world the better for our having been here.

This is a question of intergenerational equity.  And the way that Government goes about ensuring that it creates a future that is both prosperous and equitable is by turning its policy into law.

The Clean Energy Legislation Package

The legislation that I am announcing this morning is a comprehensive approach to meeting the challenge of climate change while providing a significant transformation of the Australian economy.  In essence, the package:

  • implements a carbon pricing mechanism for Australia to cut carbon pollution and move to a clean energy economy;
  • sets out how the carbon price will be run and enforced;
  • establishes the legal foundations of an Australian carbon market, including though the designation of carbon units as personal property and regulatory oversight arrangements;
  • links the carbon price to the Carbon Farming Initiative and to other credible schemes internationally;
  • provides for assistance to emissions intensive and trade exposed industries through the Jobs and Competitiveness Program and to electricity generators to ensure energy security;
  • excludes agriculture from the mechanism;
  • sets up a Clean Energy Regulator to run the mechanism;
  • sets up an independent Climate Change Authority to advise on the future direction of the mechanism;
  • gives assistance to Australian households that need it most, including pensioners, low and middle income earners.

It also sets out the design of the carbon pricing mechanism that the Government announced on 10 July 2011, and how this will link to other laws and regulatory systems in place in Australia.

The package consists of a suite of 14 bills that will be available on the Government’s website www.climatechange.gov.au. https://www.cleanenergyfuture.gov.au/  While I am not intending this morning to take you step by step through each of the bills – that is a pleasure for another time – I should briefly describe the main architecture of the package.

The central bill of the package is the Clean Energy Bill 2011. This bill establishes the carbon pricing mechanism and deals with assistance being provided to support jobs and competiveness in our economy as well as maintain our energy security. The principal objectives of this bill are:

  • to take action directed towards meeting Australia’s long-term target of reducing net greenhouse emissions to 80 per cent below 2000 levels by 2050 and take that action in a flexible and cost effective way.
  • to support the development of an effective global response to climate change; and
  • to give effect to Australia’s international obligations under the United Nations Climate Change Convention and the Kyoto Protocol;

It is worth reflecting on these, although I suspect that, as law students, you usually skip to the operative provisions to get to the specifics.

On 30 December 1992 Australia ratified the United Nations Framework Convention on Climate Change. The Convention is aimed at stabilising greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.

Article 4.2(a) includes an obligation on Australia to ‘adopt national policies and take corresponding measures on the mitigation of climate change, by limiting anthropogenic emissions of greenhouse gases and protecting and enhancing its greenhouse gas sinks and reservoirs’. This legislation will give effect to that obligation.

The establishment in legislation of the 2050 target is also significant. Many of you will still be in the work force in 2050. This legislation will take Australia’s net emissions down from a projection of over 1 billion tonnes per year in 2050 to just over 100 million tonnes, effectively saving 9 out of every ten tonnes we were going to emit. Cumulatively over 17 billion tonnes of carbon pollution will be saved.

The bill will also specify the rules for who is covered and what sources of carbon pollution are included, the obligation to surrender emissions units, caps on the amount of carbon pollution from 1 July 2015, international linking, monitoring, enforcement, appeal and review provisions.

There are two bills that will establish the administrative regime: the Clean Energy Regulator Bill 2011, which will set up the Clean Energy Regulator to administer and enforce the mechanism, and the Climate Change Authority Bill 2011, which will set up the Climate change authority to advise the Government on the future design and direction of the mechanism.  This bill will also set up the Land Sector Carbon and Biodiversity Board.

Then there is the Clean Energy (Consequential Amendments) Bill 2011 that will ensure that the mechanism is integrated with existing laws, regulatory schemes and processes.  Taken together, these four bills deliver the main features of the mechanism.

Compliance with the mechanism will be ensured by way of charges.  To ensure that the requirements of section 55 of the Constitution are complied with, there is a set of charges bills which I will not deal with in detail this morning.  The bills are, of course, on the website.

There are three Bills which relate to the fuel taxation arrangements and the fuel tax credits system.

There is to be a final bill in the Clean Energy Legislation Package dealing with payments and transfers – matters that successive Governments have dealt with in the ordinary course of legislation.  It is the Clean Energy Amendment (Household Assistance) Bill, which will deliver the household assistance measures designed to help Australians to adjust to a low emissions economy.  The Prime Minister announced the details of these changes on 10 July 2011.

For the sake of completeness, I should mention that the Government intends to introduce legislation in 2012 that will implement other elements of the package announced by the Prime Minister on 10 July 2011.  These will cover the Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA).  And the Government will also be introducing a number of additional programs to deliver various aspects of the mechanism as part of the 2012 budget process.

Engaging with the Community and Key Stakeholders

The release of exposure drafts is a basic element in assisting the community and key stakeholders to understand the policy and how it will impact on them.  We invite comment and suggestions, and look forward to hearing from those who have specific suggestions to make on how the legislation can be made to work better and to be more effective.

This is complex policy, embracing as it does important social policy objectives, economic transformation, energy security and environmental outcomes.  To assist householders and other interested parties better to understand the purpose and scope of the Government’s carbon pricing mechanism, the Government is releasing these exposure drafts of the clean energy legislative package to inform public discussion and afford interested parties an opportunity to comment on the detailed legislative drafting of the carbon price and associated reforms.

In similar vein, the Government will next week start mailing a brochure to Australian households that will outline what a carbon price means for them.

This brochure will give detailed factual information of how the carbon price will impact on households, and the assistance including tax cuts, higher family payments and increases in pensions and other benefits to help households with the moderate price impacts of the carbon price. These benefits will start to be delivered from May and June of next year.

We understand that households are keen for factual information about the Government’s household assistance package.

That is not surprising given the misleading scare campaign run by some who oppose the Government taking action on climate change.

Conclusion

Law is the bedrock on which a constitutional democracy rests.  It is the glue that binds together our community, protecting our rights, ensuring that obligations are met, and sustaining the harmony and equilibrium that are essential if we are to continue to develop and grow as a society, as an economy and as a nation.

The package that I have announced this morning constitutes a major economic and environmental reform.  To address the consequences of climate change before our world is unalterably changed is the right thing to do.  It is also the equitable thing to do.  But, most of all, it is the wise thing to do, because it protects the futures of subsequent generations through a fundamental transformation in the way we do business, in the way we run our economy, in the way we live.

The Government is proud of the package it has developed to deliver the promise of a prosperous future.  I commend it to all of you, as future legislators and officers of the law.