TRANSCRIPT OF TELEVISION INTERVIEW WEEKEND SUNRISE ON CLIMATE CHANGE

Date:  09 November 2013

MONIQUE WRIGHT: The United Nations will hold its 19^th annual conference on climate change. Also, next week, the Government will introduce legislation to scrap the carbon tax. Labor has said it will support the repeal as long as it’s replaced by an emissions trading scheme.

ANDREW O’KEEFE: Environment Minister Greg Hunt says that electricity prices will fall as soon as the tax is scrapped. Shadow Minister, Mark Butler, says that’s a reckless promise. There are so many issues to be covered here, so we’re really fortunate to be joined by both men this morning. First up, gentlemen, can I ask the both of you as we enter this debate, can we take it as read that both of you, (a) agree that climate change is occurring, (b) that humans are a significant contributor to that change, and (c) that Australia should take measures to reduce its carbon output? Do we all agree on that much?

GREG HUNT: Andrew and Monique, good morning. In my case, the answer to all three is clearly, categorically yes.

O’KEEFE: And Mr Butler?

MARK BUTLER: Well, it is in my case as well and my case reflects the position of the Labor Party as well. I think the question is whether broadly in the Liberal Party there are still some questions over accepting the science here.

O’KEEFE: Well, we’ve just had the Minister say that that is the Coalition’s official policy, that the science is there, the science is in, so on with the debate about what to do with that.

WRIGHT: Yeah. It’s a good premise to start with. Mr Hunt, let’s start with you. Your repeal is destined to fail next week unless Labor backs it. Do you support a price on carbon and would you consider implementing an emissions trading scheme as Labor supports?

HUNT: No. This is exactly the same thing as a carbon tax. And this is, I think sadly for the Australian people, the great con. What we have is a carbon tax by another name. The Julia Gillard carbon tax was always a fixed price for three years and then a floating price, which by Labor’s own analysis was going to soar by 50 per cent to more than $38 within just a few short years. So, whether you call it a carbon tax or an emissions trading scheme, it’s a tax on electricity and a tax on gas and we can do it without this. We can have a real impact immediately by saying to the Australian people, “we will take the tax off electricity and gas”, and that can have an impact as soon as the tax is repealed, and I hope the ALP will stand by their word and terminate the tax, but not just try to change its name.

O’KEEFE: Well, there are many economists who argue vociferously that this is not a tax; it is simply a market mechanism. But, Mr Butler, the Labor Party has said it will support the repeal if the emissions trading scheme replaces the carbon tax. Now the point of the carbon tax is to raise the price of unclean energy to account for its negative externalities. The idea was that we’d all use less energy, we’d start buying more efficient energy products, the price of energy from low emission sources would become more competitive and, therefore, we would reduce emissions. Does an emissions trading scheme affect consumer behaviour in similar ways?

BUTLER: Well it does, but in a different way though. The point of a carbon tax is to have a relatively high price, but no cap on emissions. So the thing that changes behaviour, effectively, is the height of the price. An emissions trading scheme is different. The discipline in an emissions trading scheme is that there is a legislated cap on carbon pollution that reduces over time so Australia can only produce so much carbon pollution every year. That is what is being removed in the bills that Greg Hunt and Tony Abbott will bring before the Parliament next week and that is the major objection that the Australian Labor Party has. An emissions trading scheme broadly around the world is recognised as the cheapest, most effective way to deal with climate change. The OECD released a report only this week that said that. A survey of economists last week overwhelmingly said that as well, and that is the policy position of the Labor Party. So, we are as one on the termination of the carbon tax. The debate over coming weeks will be what replaces it – an emissions trading scheme, a cap that lets business work out the cheapest, most effective way to deal with climate change, or Greg Hunt’s direct action policy. That will be the debate.

WRIGHT: So Mr Hunt, talk us through your direct action plan. How do you plan on reducing carbon emissions by the target amount?

HUNT: Sure. There are two ways that the world can deal with this issue. The first way is the carbon tax and, whether you call it a carbon tax or an emissions trading scheme, it’s a tax on electricity. And the ALP’s model, as I say according to their own assessments only three or four months ago, will see a 50 per cent rise in that tax even when they change its name. The other way is where you directly focus on reducing emissions by cleaning things up. This is where the clean development mechanism, which is the UN’s primary system operates. For us, that’s about cleaning up, not closing down brown coal power stations, which instead of being given a five and a half billion dollar payment under Labor’s scheme, is about cleaning up waste coal mine gas, cleaning up waste landfill gas, real things that people can actually understand that will reduce emissions, rather than just basically a large electricity tax and, no matter what they call it, they’re still keeping it and it’s still going up and they’re still standing by it.

O’KEEFE: Mr Hunt, last time you were on this show you said that your plan involved two major strategies; cleaning up dirty polluters, and also a heavy reliance on carbon capture. And you said that the CSIRO had shown that we could reduce emissions by 20 per cent over 4 years with carbon capture. Now I looked up that report you referred to and it says, “yes, that is a possibility, but it is highly unlikely that that will happen because there are too many biological, technical and logistical obstacles to that being achieved, and you’d have to convert millions of hectares of crop grazing land into forest in order to make that happen”. So, you say it can be reduced by 20 per cent over four years. They say it can be reduced by one per cent by 2020, which is when your target is for.

HUNT: Well, I think with great respect, I know the paper you’re referring to and that’s by one of the leaders in Australia, Michael Battaglia. He set out a goal, which was far more ambitious than we had ever proposed in terms of a national reduction of 20 per cent in total emissions from practical things in the environment ….

O’KEEFE: Yeah, but he also said that it was very unlikely that would ever happen because the obstacles were almost insurmountable.

HUNT: Well, we can actually do things now. Even since that’s been done, it’s very clear that were making far more progress, we’re right on the edge of approving a way in which soil carbon can be accounted for and recognised with re-vegetation, reforestation, avoiding deforestation, in other words protecting forests – really practical things that can be done in the landscape in order to bring emissions down, and practical things, in terms of cleaning up power stations in order to prevent emissions going up. That’s what we focus on, real things. And the ALP’s way, as Mr Butler has conceded, is an electricity tax. And, whatever you call it, there are two approaches here; driving up electricity prices through their tax or ETS, or getting rid of it.

O’KEEFE: You say that, but there has been a decrease in emissions from electricity, despite the claims you have made, since the carbon tax was introduced. So, it is having a real effect.

HUNT: Well, actually the Australian energy market operator has been very clear over the years that any change in electricity consumption in Australia has sadly been driven by the collapse in our manufacturing industry. That’s been the main element. And the reason why is because of overseas demand and the fact that we are shifting production from Australia, in terms of our heavy metals production such as aluminium to China and India and Indonesia.

O’KEEFE: And that all happened in a year?

HUNT: The carbon tax just makes that worse.

WRIGHT: We are running out of time.

BUTLER: Well, that’s simply not right.

WRIGHT: A very quick response from you, Mr Butler?

BUTLER: Well, that’s simply not right. The carbon emissions from the electricity market came down seven per cent last year in 2012/3. About a third of that was because there was less demand, some of which is because people are putting solar panels on their roofs and a whole range of other energy efficiency. But two thirds of it was because of a growth in renewable energy during the six years of our government, 25 per cent growth in renewable energy as a share of the national electricity market. So, you’ve got to have a range of different measures -  a cap on carbon pollution that drives discipline in the energy market, but also policies that spur the growth of renewable energy, and that’s what we’ve been doing over the last six years.

WRIGHT: Gentlemen, we are out of time. Thank you both. We appreciate it.

O’KEEFE: There should be plenty more debate on this over the coming weeks. Thank you very much, Minister, and Shadow Minister.