Tony Abbott’s Direct Action policy will be a colossal waste of tax payers’ money.

TRANSCRIPT OF INTERVIEW ON RN DRIVE

Date:  23 April 2015

HOST: Joining us now to respond to the results is Labor’s Climate Change Spokesperson, Mark Butler. Welcome to the program. Four times the emissions reduction of Labor’s carbon tax and at one ninetieth of the price. What’s your response?

MARK BUTLER, SHADOW MINISTER FOR CLIMATE CHANGE: Well, it’s complete rubbish of course. Labor was in the process of putting in place an emissions trading scheme that would have a legal cap on carbon pollution and involve an effective carbon price paid by the big polluters that is about half of the carbon price that is now being paid by taxpayers, not by big polluters, but by taxpayers, under the Greg Hunt scheme. Today’s auctions have confirmed what experts have been saying now for the best part of five years – that Tony Abbott’s Direct Action policy will be a colossal waste of tax payers’ money and deliver no meaningful reductions in carbon pollution.

HOST: At this price, the Government says it’s well on track to achieve, or even exceed, the 232 million tonnes of carbon abatement by 2020, Australia’s carbon target. What do you think it will achieve?

BUTLER: Well, of course the contracts that were released today – assuming they’re all able to be discharged, some of them are a bit speculative – but assuming all of them are discharged, are going to deliver pollution reductions over 10 years. So the 47 million tonnes, at best, will be delivered over the next ten years, so the middle parts of the next decade. But the big problem with this, leaving aside the fact that tax payers are paying for this and they’re paying a very, very high price indeed by global standards, the biggest problem with this policy is that at the same time some of these companies are getting money to do this, all of the big polluters in the country are free to do whatever they want. Now we received data only a few weeks ago that showed that carbon pollution has already started to rise in the electricity sector because of Tony Abbott’s attack on the Renewable Energy Target and just the pollution rise we’ve seen over the last 12 months, if you spread it over the next ten years, we’ve pretty much cancelled out the pollution reduction that Greg Hunt paid for today.

HOST: My guest on RN Drive is Labor’s climate change spokesperson, Mark Butler. And you can text us. What do you think of the results of the Government’s carbon auction? 0418226576. It has exceeded expectations though hasn’t it Mark Butler?

BUTLER: No I don’t think it has at all. The carbon price, as I said, is being is one of the world’s highest carbon prices at $15. Treasury advised us in 2013 that the Emissions Trading Scheme that Labor has been arguing for would have an effective carbon price of closer to $7 or $8 because businesses would be able to access global markets. Leaving aside the problem that I have with the principle that tax payers pay for this rather than big polluters, tax payers are just not getting value for money. In addition to a high price, also going through the list of companies that have received funding today, you see a whole range of projects, like landfill gas projects for example, that have already been operating for more than 10 years so, there’s a very big question mark over whether tax payers are simply paying money for companies to do things they were already either doing or were intending to do anyway.

HOST: But, look at the results. The results according to the figures and they’re not just Government spin, they’re independent figures as well. At this price the Government says it’s well on track to achieve or even exceed the 236 million tonnes of carbon abatement so –

BUTLER: [interrupts] Well, they need a lesson in maths if they think that’s right. As I said, this achieves 47 million tonnes over the next 10 years, at best. That assumes every contract is able to be performed. At the same time, we’re getting data that shows that the electricity sector is going to wipe out that figure just because of Tony Abbott’s attack on the Renewable Energy Target. The Climate Change Authority released a report earlier this week that suggested that over the 10 period that Greg Hunt’s been talking about today, Australia should be reducing its carbon pollution, that on the back of an envelope, I calculate at well more than one billion tonnes. Well more than one billion tonnes. So today’s results just confirm what everyone has said. This will be a colossal waste of tax payers money that allows big polluters to push pollution into our atmosphere –

HOST: [interrupts] But your carbon price delivered reductions of 12 million tonnes over two years and Greg Hunt says that’s a lower rate than what the Coalition will achieve now.

BUTLER: Well, the emissions trading scheme was never able to commence. The formal cap on carbon pollution was never able to commence –

HOST: [interrupts] But it did commence.

BUTLER: No, no, the carbon tax did, but the formal cap on carbon pollution that we under Kevin Rudd’s prime ministership said would start last year, was repealed by Tony Abbott. So there was never any legal control on the pollution that the several hundred biggest polluters in Australia –

HOST: [interrupts] But I’m asking about your carbon tax.

BUTLER: So what you saw in the first instead in the first year of our carbon price was carbon pollution reducing in the national electricity market by about seven per cent, just in the first year because of the explosion in renewable energy, up by about 25 per cent in that first 12 months. What you’ve seen since the election of Tony Abbott is a massive attack on the renewable energy sector which means that their share of the electricity market is in decline. And the share by big coal, by the coal-fired generators which was starting to decline under Labor, is starting to increase again. Which sees all of the work that was done by $45 million of tonnes being bought by tax payers’ money today completely being wiped out by changes in the electricity market.

HOST: On RN Drive my guest is Mark Butler, Labor’s environment spokesperson and you can text us on 0418226576 or tweet us at RN Drive. If you have a strong view, or even a mediocre view, whatever kind of view you have on this issue. Now the Environment Minister Greg Hunt says he thinks the Emissions Reduction Fund could actually beat the five per cent target by 2020. And instead of 236 million tonnes, achieve a reduction of 500 million tonnes, that’s quite – that’s almost a doubling, it’s quite extraordinary. Surely you’d applaud that wouldn’t you?

BUTLER: Well, if wasn’t complete magic pudding mathematics you might. Today he’s purchased maybe 47 million tonnes, using a quarter of the budget. That 47 million tonnes will have to be delivered, not by 2020, but over the next 10 years so how he can possibly come up with a figure of 500 million tonnes, when he’s already spent a quarter of the money, is utterly beyond me. I think it’s utterly beyond anyone who’s got a rudimentary understanding of maths.

HOST: If he does achieve it, will you come back on the program and applaud him?

BUTLER: He’s simply not going to because at the same time he’s doing this, as I said, big polluters are increasing their pollution and completely negating any impact that this auction has today. And as I said also, it appears from looking at the list that Greg Hunt is giving tax payers money to a whole long list of projects. Landfill gas projects for example being run by one of the country’s biggest electricity providers that’s been operated for more than 10 years.

HOST: But if he does achieve the target that we’re trying to reach – five per cent target by 2020 – you may not, this may not be the kind of regime you prefer, but will you not concede that it’s having at least demonstrable results?

BUTLER: I’m not going to get into the sort of fairy tale hypotheticals that Greg Hunt is trying to spin today. Even his own maths show that the sort of things that he’s been talking about over the last 24 hours are utterly improbable, utterly improbable and that’s why no other country on the planet is using this approach to dealing with climate change. Every other country with which we usually compare ourselves – our oldest trading partners in Europe, places in North America, China, South Korea, Japan – are all using an emissions trading scheme model that actually places a legal discipline on the big polluters to start to reduce their carbon pollution. That is the sort of thing that leads to the innovation we need. We’re not seeing any innovation in this fund. Of course, a number of good projects are in this fund and a number of them are projects that were supported by Labor as well. But that doesn’t mean that this is in any way a substantial climate change policy.

HOST: Mark Butler, he’s also just told a media conference that this result is a stunning repudiation of the carbon tax, that the average carbon tax averaged out at more than $1300 a tonne. Does it produce a verdict that the carbon tax is a failure?

BUTLER: Well of course shortly before the 2013 election, Kevin Rudd, Chris Bowen and I indicated that we would be terminating the carbon tax if elected and we would be moving much more quickly to an emissions trading scheme than was previously the plan so that by now an emissions trading scheme would already have been in place for more than 12 months. So, talking about the carbon tax really is talking about all that is long gone. In any event though, he is completely wrong.

HOST: But given that he’s comparing his current figures to the results under the carbon tax, it’s not helpful for Labor, given the results of the carbon tax were poor.

BUTLER: Well his figures are wrong in any event. As I said, a carbon price that was nowhere near the sorts of figures he’s talking about, was already, alongside with our renewable energy policies, achieving a real change in our electricity sector, real innovation. And that’s the sort of change that we’re  going to need if we’re going to have a meaningful response to climate change. Not this sort of slush fund that Greg Hunt and Tony Abbott are fixated on.

HOST: Greg Hunt also says that the Labor system paid companies to emit and the auction system paid companies to reduce emissions, do you agree with that assessment?

BUTLER: Well of course I don’t. And I don’t think anyone else would either –

HOST: Well he obviously does.

BUTLER: Well, he might. But Tony Abbott is paying tax payers’ money over to polluters, as I said, in many cases it would appear from today’s auction to do things they were doing anyway to reduce their carbon pollution, while at the same time all of the biggest polluters in Australia, none of whom were really on the list published today, are free to do whatever they want, to put as much pollution as they want, into the atmosphere. That is the problem with this approach that has no legal discipline on the amount of carbon pollution being produced in Australia.

HOST: Mark Butler, thanks for coming on RN Drive and having this conversation with me.

BUTLER: Thanks Patricia.