8 November 2011 – At last Australia has a carbon price and a Clean Energy Future package that will unlock the riches from saving the Earth, rather than burning it up.
The package of carbon price bills passed in the Senate today to applause from the public galleries show the Prime Minisiter Julia Gillard is as resilient and tough as this country needs to be to survive the coming environmental storm.
Watch the mustering army of carbon and clean energy experts, the consultants, engineers, inventors, investors, philanthropists, doers and sayers bring out the heavy artillery.
The Climate Institute says it will be a winner for Australia on the global stage; it can stand once more as a leader in this space.
It will put “wind in the sails of other jurisdictions about to introduce, or considering, emissions trading schemes which similarly price and limit carbon pollution,” especially iin the lead up to the next climate talks in South Africa, Climate Institute John Connor said.
And we are not alone.
Climate Change Minister Greg Combet told ABC Radio today that other countries are moving.
“I will be talking to my Chinese counterpart for example in about a month’s time in South Africa about these issues.
“They are introducing six emissions trading schemes in 2013, just like we are doing. In fact the Chinese Government is very keen to talk to us about designing these things and what our experience has been.
In California, the eighth largest economy in the world and of course a state of the United States – the Californians will be introducing an emissions trading scheme that will start selling the permits next year, it’ll come into full compliance in 2013 also.
“South Korea’s one of our large trading partners too and they’re due to introduce one in 2015. It is simply not the case that somehow or rather we’re the only ones in the world and whatever we do is irrelevant. In fact, it important that we take our fair share of responsibility, just as it is important for other nations to do the same.
“And in terms of our long term interest, making this adjustment in our economy to reduce our greenhouse gas emissions will drive a lot of investment and improve productivity in industries that are large polluting industries. It will also drive a lot of investment in cleaner energy sources. It is the countries that make these changes now that will be the most competitive in the decades to come.
“So it’s a very forward looking reform that we’re putting in place that will go through the Senate today. One that will be good for our environment, play our part responsibly internationally, and good for our economy.”
We could be too far gone – the data coming out now on global warming is grim – but at least we now stand a chance, instead of sticking our heads in the sand and waiting.
Here is the early news and reaction seeping through:
From The Sydney Morning Herald The Gillard government declared victory for a “historic economic reform” today after the Senate finally passed a carbon tax – laws that have created political havoc for four years and have been debated for more than a decade.
Labor and the Greens combined to pass the 18 “Clean Energy Future” bills just after midday, to applause from the packed public galleries.
Finance Minister and former climate change minister Senator Penny Wong said that, on the Labor side of politics, “we accept the science, we accept the need to act [on climate change], and, like John Howard and Malcolm Turnbull, we accept the science and the advice that putting a price on carbon is the best way to reduce emissions.”
Senator Wong failed to secure the passage of the former Rudd government’s emissions trading scheme.
Coalition leader Tony Abbott was overseas when the Senate took its vote, but National Party frontbencher Senator Barnaby Joyce declared it was “a sad day when we reorganise our economy on the basis of a colourless, odourless gas … it is the height of foolishness.”
He said the tax would do nothing to change the temperature of the globe “whether it is going up down or sideways” but said Australian households would definitely be poorer and the Coalition “would make certain” they hadn’t forgotten the reason at the next election, when he predicted Labor would be “crucified”.
Greens Senator Christine Milne said Mr Abbott had “cut and run” and could have delayed his departure for a conference in Britain to be in Australia for the vote.
A last minute amendment by the Coalition and independent Senator Nick Xenophon to allow electricity generators to defer payment for the purchase of billions of dollars in forward-dated pollution permits failed.
The Climate Institute chief executive John Connor said:
“Australia now has laws which not only put a price on carbon pollution but also limits, with legislated minimum reductions from 2015.
“This is a vital cog in Australia’s pollution reduction machinery with the potential to help cut around 1 billion tonnes of carbon pollution from the atmosphere between next year and 2020.*
“The challenge now is to realise that potential by making it work to boost global action and to make it work with other policies to ensure Australia turns the corner towards low carbon prosperity.”
“This vote means Australia now brings greater credibility going into international climate negotiations starting later this month in South Africa. It also puts wind in the sails of other jurisdictions about to introduce, or considering, emissions trading schemes which similarly price and limit carbon pollution.
“Europe is expanding its scheme. California has a scheme staring next year. China, South Korea and now South Africa are piloting schemes or giving them active consideration.
“Australia’s actions at the UN talks in Durban will be keenly watched to see how our nation uses its enhanced credibility on issues like the Kyoto Protocol’s second commitment period, global accounting rules and financing cleaner development and adaptation works in neighbouring poor nations.”
“The new legislation rightly allows use of credible global pollution reduction investments to help reduce the pollution impacts of Australian industry and to boost global solutions to a global problem.
“But shifting Australia to lower carbon prosperity will need more. It will require ongoing vigorous action on, and rigorous monitoring of, other elements of the agreement by the Multi-Party Committee on Climate Change. These include the National Energy Savings Initiative, carbon farming and the Clean Energy Finance Corporation.”
“In addition, we need to ensure policies and investment in both the public and private sectors transparently and effectively connect with solutions to develop the technologies, skills and jobs so crucial to reducing our economy’s dependence on carbon pollution.”
“The Climate Institute is dedicated to working with all parties to make these laws work to help boost global ambition and help the Australian economy make the shift.”
*Cutting Australia’s predicted 2020 pollution level so that it meets the bipartisan targets of 5 to 25 per cent below 2000 levels would cumulatively reduce Australia’s pollution impact by between 681 million and 1.1 billion tonnes between 2012 and 2020. Both the Government and the Coalition link stronger reductions to levels of global action. The Act requires the Minister to make a decision in 2015 based on a 2014 recommendation from the Climate Change Authority.
Landmark climate law decades in the making
Australian Conservation Foundation chief executive officer Don Henry said: “Scientists have warned about climate change for decades – in fact the first article about carbon pollution in ACF’s Habitat magazine was in 1974 – and now we have a law to make polluters pay.
“So many Australians have played a part in making this a reality – the scientists who sounded the warnings about atmospheric changes and bleaching of coral reefs, the business leaders who stood with ACF and called for a price on pollution in 2006 and of course the millions of people who wrote, visited MPs, protested and voted for action on climate change.
“This important first step in the process of tackling climate change is for all those who have said ‘yes’ to a clean energy future.
“I would like to commend all the serving politicians – Labor, Green and independent – who have had the courage, foresight and determination to say yes in the parliament, despite the intense pressure they have faced from a well-funded scare campaign against this law by vested interests who don’t want to change.
“Industries that do want to contribute to creating a cleaner and healthier future for our children and grandchildren now have an incentive to find new, cleaner ways to do business.
“ACF encourages the government to move quickly to establish in law the important complementary parts of the clean energy package, particularly the Clean Energy Finance Corporation – the body that will help harness Australia’s massive untapped, abundant renewable energy resources.”
ABC Radio this morning transcript:
ADAM SPENCER: A significant day today in the Federal Parliament, it’s expected that the climate change – that the carbon tax legislation will pass through the Senate. Minister Greg Combet, the Minister for Climate Change joins us. Now a significant day, Minister?
CLIMATE CHANGE MINISTER GREG COMBET: It sure is Adam. It’s a very important environmental and economic reform and we expect it to get through the Senate today, come into law and that means the carbon price will start on the 1st of July next year. That’s a very important step for this country because we will be able to go about cutting our greenhouse gas emissions and driving investment in clean energy, things like natural gas, wind and solar power.
SPENCER: The Opposition are asking for a last minute amendment to be considered whereby electricity generators don’t have to pay for their permits up front, they can delay their payments. They say that will substantially reduce the increase in electricity prices. Are they correct?
COMBET: No, they’re not, and we’ve been through very extensive consultations with electricity generators over a long period of time, done detailed modelling, and we’ve got some safety valves such as access to a line of credit if the generators need it. So, we think we’ve designed the package in an appropriate way really. The risk to electricity prices is all coming from the Coalition because Tony Abbott’s ridiculous so-called ‘blood oath’, that will never be implemented, to repeal the carbon price legislation is the thing that’s creating uncertainty for those businesses and causing risk to be factored into their investment decisions.
SPENCER: When it comes to uncertainty in a carbon price, is it true the European carbon price has collapsed to somewhere between $8.70 and $12.60 a tonne at the moment, after the ongoing economic uncertainty in Europe?
COMBET: Yeah well I was going to say you might’ve noticed there’s been a few problems in Europe’s financial markets, and the carbon market’s been affected by that as well. So yes, the price in Europe has dropped to a considerable degree. But the important thing here is of course, with our carbon price it’ll be a fixed price for three years, and it’s not until mid- 2015 that we’ll go to a market price. That’s when the European markets will influence what our price levels are too, and you’d expect in three and a half years time the European markets to recover.
SPENCER: So one year, eight months from now, when our carbon price starts at $23 a tonne, if the European price is still, say, $10 a tonne, that’s irrelevant? What, there’s no interaction between those markets?
COMBET: Well we’ve got a fixed price in place for three years, and there is no interaction between our market and the European market during the first three years of the scheme. We’ll have our price in our economy and that will drive the changes that a carbon price does. Essentially what it does, at the end of the day Adam, is create an incentive for the largest polluters, there’ll be less than 500 of them that will have this liability, it creates an incentive for them to cut their pollution levels, because if they can do so they can reduce their obligation to pay the carbon price. And one of the ways they do that is use cleaner energy sources, and renewable energy in particular. So we’ll have a price signal in our economy, but when it goes to a market price by mid-2015 obviously we’d expect the European markets to recover, and it’s then that our price and the European price, and other prices around the world, will have a relationship.
SPENCER: It’s, our price has a floor price of $15 a tonne. If the European price is still significantly below that in 2 1?2 – 3 years when the markets emerge, does that create potential volatility or inequity in the system, Minister?
COMBET: No, I don’t think so. It’s still a long way away yet Adam. Even the foreward futures markets for European prices are around about our floor price at the moment or just underneath it, so in 3 1?2 years time, I think once we’ve got through debt crises in Greece and hopefully markets in Europe are well and truly recovered by then. The carbon price relationships between ours and Europe will be pretty steady I think.
SPENCER: You know the other thing which has been claimed about the legislation, which comes into effect from today – passes through the Upper House, you hope today, and comes into effect from the middle of next year is that, on the world scale when you consider facts like the increase in China’s emissions in the year 2010, how much China’s emissions went up by in 2010 was equivalent to the entire emissions of the United Kingdom and far greater than the all Australia emissions, and even if we were to stop producing any carbon tomorrow, just the rate of growth of Chinese emissions will continue to morph what we do. So why are we creating this technical and financial impost on Australian businesses when at the moment the rest of the world is just not following us down this path?
COMBET: Well look these are all arguments to do nothing because somehow or rather Australia is irrelevant to it all. The fact of the matter is if you go back to the foundations of this policy, scientists are clearly telling us that greenhouse gas emissions are contributing to
the warming that’s been experienced, that’s been empirically measured for a long period of time, rising sea levels, we’ve got a problem with climate change that we have got to tackle. You have to tackle it by reducing greenhouse gas emissions. Obviously it’s an international issue and all countries need to make an effort, particularly the largest emitters. On that front, Australia is in the top 20 emitters internationally of greenhouse gases but more importantly to many people when they’re looking at it from overseas, Australia is the highest polluter of greenhouse gases per person amongst all the advanced economies…
SPENCER: But Minister – but Minister, China and America between them provide something like 40 per cent of all the world’s emissions. So even though we fit into the top 20, you’ve got two countries there doing the overwhelming bulk of the emissions – almost half between the two of them – if they’re not moving in this direction, if they don’t have legislation and scheme at pace with ours, what is the point of us leading out on this?
COMBET: Perhaps with respect Adam, if you let me finish the answer I can answer that bit too. I will be talking to my Chinese counterpart for example in about a month’s time in South Africa about these issues. They are introducing six emissions trading schemes in 2013, just like we are doing. In fact the Chinese Government is very keen to talk to us about designing these things and what our experience has been. In California, the eighth largest economy in the world and of course a state of the United States – the Californians will be introducing an emissions trading scheme that will start selling the permits next year, it’ll come into full compliance in 2013 also. South Korea’s one of our large trading partners too and they’re due to introduce one in 2015. It is simply not the case that somehow or rather we’re the only ones in the world and whatever we do is irrelevant. In fact, it important that we take our fair share of responsibility, just as it is important for other nations to do the same. And in terms of our long term interest, making this adjustment in our economy to reduce our greenhouse gas emissions will drive a lot of investment and improve productivity in industries that are large polluting industries. It will also drive a lot of investment in cleaner energy sources. It is the countries that make these changes now that will be the most competitive in the decades to come. So it’s a very forward looking reform that we’re putting in place that will go through the Senate today. One that will be good for our environment, play our part responsibly internationally, and good for our economy.
SPENCER: Can I ask you Minister in closing, it was Kevin Rudd’s decision not to pursue his emissions trading scheme, that many people trace as the moment where support for him as Prime Minister became to collapse, it saw the Labor Party move on him, Julia Gillard now the Prime Minister etcetera. In hindsight, should Labor have gritted its teeth and pushed on a few years ago as it was then proposed?
COMBET: I don’t know if I’m the best one to make an observation about the hindsight with respect to that. The thing is I think Adam…
SPENCER: Well you can look at the polls now. You can look at the hung parliament. You can look at the consternation around this at the time Kevin Rudd said it was the moral imperative of our time and thought he had tremendous public support for it.
COMBET: Well I remember all of that pretty well. I was the junior Climate Change Minister at the time. Look it’s a reform that we need to make. The sooner we make it, the sooner we can start making these adjustments and the less costly it is over time to our economy to do so. I’ve certainly always been of the view that it is a change that we have to make. I had that view and spoke about it publicly when I was leader of the trade union movement years ago. We’ve all known, including in the business community, that this is a necessary change to make. We have to do something like carbon pricing which is at least cost to our economy and that’s the way the Government has designed it. The important thing is that we’ve just got to put a lot of the political ups and downs – it’s an important reform, you’d expect a lot of debate – but we’ve just got to park that now and get on with it and implement it.
SPENCER: That makes today a significant day. Thank you very much for your time Greg Combet.
COMBET: Thanks a lot Adam. See you. ENDS