Labor states: all talk but no action on emissions trading

Hansard: 23 May 2007 ASSEMBLY

Mr CLARK (Box Hill) — The decisions that need to be made about greenhouse gas emissions in this state, in this nation and around the world are some of the most important for the future that have ever had to be made by humanity. If the scientific predictions are accurate and we fail to adequately curb emissions, we face far-reaching and damaging climate change.

However, the actions that need to be taken to achieve the level of greenhouse gas reductions recommended by prevailing scientific advice will have enormous effects on our economy, our standard of living and our way of life.

Opposition members support a national emissions trading scheme, but we do not agree with trying to lock the Victorian community into the untested and flawed specifics proposed by the Premier. Once you accept the scientific predictions that human emissions of greenhouse gases are causing unacceptable global warming, an emissions trading scheme is almost certainly the most effective way to achieve whatever reductions in emissions we decide upon as a community. However, the behaviour of the Labor Party around Australia in responding to the threat of global warming has been a disgrace, characterised by a failure of leadership, by duplicity and by the sacrifice of the public interest for political advantage.

Let us make the point absolutely clear: the primary constitutional responsibility for emissions control in Australia rests with the states, and even the Deputy Premier himself admitted that point earlier in this debate. There has been nothing whatever stopping the Bracks government from introducing controls on greenhouse gases in Victoria at any time since it came to office. Indeed, the Liberal Party has for some time been calling on the government to provide certainty to the Victorian power industry by actually spelling out an emissions policy. There has been nothing stopping the Bracks government and the other Labor states from doing the hard work of exercising their constitutional responsibilities and setting the reductions and then working with other states and territories to establish a national trading scheme.

If the Kennett government had refused to act on energy reform without commonwealth agreement in the same way that the Bracks government and other state governments are behaving on this issue, we would not today have the competitive and successful Victorian energy market that even the Minister for Energy and Resources has been boasting about in the estimates hearings and in the house this afternoon. But leadership is the last thing Victorians can expect from the Bracks government.

It must also be made clear that an emissions trading scheme is simply a means to an end. It is not an end in itself. It is a means to the end of reducing harmful emissions. Before you can have an emissions trading scheme you need policy decisions about what reductions in emissions are required, by when they will be required and to whom the restrictions are to apply.

Only once those decisions have been made can you have an emissions trading scheme that will allow the emissions reductions to be transferred to the parties that are able to make those reductions at the least cost to the economy. I repeat, there has been nothing whatever preventing the state and territory governments from choosing to set those emissions reduction requirements at any time.

Given these facts, the call by the Labor state and territory governments for a national emissions trading scheme to be set up by the commonwealth can be seen for what it is — an excuse for their own failure of leadership when it comes to making the truly hard decisions about what reductions to impose. The Labor states could not agree among themselves so they passed the buck to the commonwealth.

The Queensland Premier, Peter Beattie, made it clear in the middle of last year that he would not support the states going it alone because of the threat to Queensland interests, so the Labor states came up with the ingenious solution of saying that they all support an emissions trading scheme while avoiding having to actually do anything about it by saying that they are waiting for the commonwealth to act.

Labor in Victoria and around Australia has not done the hard work or shown the leadership that is necessary. The decisions that need to be made in relation to emissions reductions have very serious consequences in both directions: if you set the cap too high, you will cause unnecessary harm to the community; and if you do not set the cap high enough, you risk drastic climate change. The Prime Minister is absolutely right in insisting that before acting we have a much better idea of what we are actually going to do and what the consequences will be, rather than rushing in and seizing on a number pulled out of thin air, as the Labor Party has done.

The early cuts in emissions will be relatively easy, but the deeper you cut the more it is going to hurt. I quote from an article by Tim Colebatch on page 13 of the Age of 22 May:

First, fixing global warming will not be painless, and don’t believe anyone who tells you it will. Some would have us believe that all we need is to sign the Kyoto protocol and introduce a low-cost emissions trading scheme, and we’ll be right. Sorry, but no, we won’t.

The unpleasant truth is that, by and large, we change our behaviour when we find it hurts us. Good words and thoughts are not enough. We cannot tackle climate change seriously without raising energy prices — and, in Australia and the US, raising them a lot.

The extent of the changes needed to achieve the sorts of deep cuts required for a 60 per cent reduction by 2050 compared with 2000 will potentially have an enormous impact on standards of living and ways of life in Australia. I would expect that we would be looking at an impact at least several times greater than that of the oil price shocks of the 1970s. Potentially thousands of jobs will be displaced and replacement jobs will need to be created, with the risk of huge dislocation and transitional costs if the changes are not properly managed. If the science is right, we need to do it, but we should not be pretending it will be easy. It is going to get harder and harder as we go along.

Let us have a look at some of the specifics the Premier is asking us to commit to today. Paragraph (1) of his motion talks about collaboration between the state, territory and federal governments. However, we also have the Labor Party wanting a commitment to sign the Kyoto protocol.

If the federal government commits to signing the Kyoto protocol, that will dramatically constrain the scope for cooperative action between state, federal and territory governments, because implicitly the federal government will have been determining the solution by signing up to Kyoto, thereby constraining what is going on. The other point to make, of course, is that before agreeing to cooperate with the states and territories any federal government would want to see that the states and territories would not run spoiler tactics on any attempt at reform, as the Bracks government has been doing on water reform.

Let us look at the second paragraph about specifying a long-term cap to reduce emissions by 60 per cent by 2050 compared with 2000. Labor wants us to rush into this target without any justification. We have had no scientific basis for this figure demonstrated to the house today and very little set out in the discussion paper released by the state and territory governments. It may be too much, it may be too little.

As I recall, the Intergovernmental Panel on Climate Change was talking about a 60 per cent reduction compared with 1990, not compared with 2000.

Other scientists say that you need to be taking 70 or 80 per cent off 1990 emission levels. On the other hand you have some that are saying that the science of climate modelling is so dependent on complex variables that it is almost impossible to come up with reliable estimates. So rather than going headfirst into a number plucked out of thin air, the hard work needs to be done, which is exactly what the commonwealth is saying should be done, and exactly what the states have failed to do to date.

In paragraph (3) of the motion — talk about the epitome of hypocrisy — there are calls for setting firm emissions on caps and absolute reductions including, as we heard in earlier debate, in the short term. But what are the cap levels and reduction levels being proposed?

We have not heard it from any of the ministers. What impact is it reasonable to impose on the Victorian economy in the short term? State government is urging the federal government to act, but these basic questions have not been answered. Labor is pretending it has a model and a solution, but all it has got is a discussion paper and a number that is 43 years away. What we need to hear in this debate from Labor is not just talk about 2050. It should tell us what it proposes to do in 2010.

There are lots of other unanswered questions in this discussion paper, which is all that the states and territories have come up with. What sectors are going to be covered? Energy presumably, but what about transport? What about agriculture? If you are only going to cover energy, how are you going to achieve the overall target without cuts by other means in other areas? If you are not making those areas subject to trading, why not? If they are to be subject, how is it going to happen?

Next, who is going to get the permits? The discussion paper said the revenue is to go into state and territory treasuries. You could say that is just a grab for cash to prop up dodgy budgets. How many permits are going to be issued to existing emitters? For how long will they be issued and on what basis? Why not issue the permits to individual citizens so that they can sell those permits to help offset the massive increases in energy costs that are going to follow from this policy?

Paragraph (4) calls for the preservation of the VRET (Victorian renewable energy target) and shows just how tied up in knots the Labor Party is, because its own discussion paper, the National Generators Forum, the CSIRO forum and others are all saying not to go for technology-specific solutions. Yet Labor in paragraph (4) is going right across its own discussion paper proposals and wants to keep the specific solutions as well. Labor might want to grandfather things, but why is it trying to extend the enormously expensive VRET and the nebulous proto-policy of the Victorian energy efficiency target. I support the amendment moved by the member for Brighton.