Member for Isaacs

Coalition's carbon deceit

01 November 2011

Julie Bishop's criticism that Australian businesses should not be able to buy international carbon permits reveals the complete rejection of basic economics that underpins the opposition's completely discredited climate change policy.

The Dreyfus Files - The Age

Julie Bishop's claim that the global carbon market is collapsing is yet another example of the deceit that is increasingly evident in the opposition's claims.

The fact is that the value of global carbon markets has grown year on year to 2009 but declined very slightly in 2010. This still represents significant growth in global carbon markets in recent years - up from about $US60 billion in 2007 to $US144 billion in 2009 and $US142 billion in 2010. Last year's very minor reduction from 2009 was in part due to lingering global recession impacts in Europe.

Julie Bishop's allegation that the World Bank is "expressing doubt" about the future of global carbon markets flies in the face of extremely positive comments by the World Bank's climate change spokesman, Andrew Steer, who I met at the climate change conference in Cancun last year. Mr Steer last month said the idea of a carbon market "is not dead or dying. On the contrary, it's catching on."

His comments followed the Bank's announcement that it had approved eight grants for developing countries - including China, Mexico and Indonesia - to help them design emissions trading schemes.

Another example of the opposition's deceit is the suggestion that "China isn't doing anything" or that China's growth in pollution will eclipse any reductions that Australia makes. Opposition Leader Tony Abbott and his shadow finance spokesman Andrew Robb this week both implied that Australia shouldn't do anything because China's emissions would grow by 500 per cent by 2020.

This is a blatantly misleading claim that needs to be called to account. The 500 per cent figure used by the opposition is the projected growth in China's emissions from 1990 to 2020.

We all know how much China has developed in the past 20 years, so it is misleading to imply that China's emissions will grow by 500 per cent in the next eight years, as Mr Abbott has repeatedly done.

In fact, the same report Mr Abbott draws that figure from states the following: "China's emissions goal . . . implies a nearly five-fold increase in emissions relative to 1990 levels, but the target still represents a 22 per cent departure from Chinese baseline emissions in 2020." Australia's own 5 per cent pollution reduction target represents a 23 per cent cut relative to 'baseline'.

Meanwhile, the Chinese government this week has been reported as confirming it intends to expand its pilot emissions trading schemes in six provinces and cities (including Beijing and Shanghai) to implement a national scheme in 2015.

It is true that the EU emissions trading scheme has been subjected to cyber fraud. Earlier this year the European Commission announced it was implementing a series of actions to strengthen the integrity and security of its carbon market.

The Australian scheme will have significant measures to protect against fraud and criminal behaviour, including tough criminal penalties for fraudulent or dishonest conduct. For example, the Australian Competition and Consumer Commission will have economy-wide oversight of anti-competitive conduct in relation to the carbon market, and the ASIC will have powers to investigate and prosecute market manipulation.

Furthermore high standards of cyber security, such as those set by Australia's intelligence agency, the Defence Signals Directorate, are being applied to the registry where permits are held and traded. And the Climate Change Authority will play a key gatekeeper role to review and advise on the types of international credits that will meet our high standards.

Julie Bishop's criticism that Australian businesses should not be able to buy international carbon permits reveals the complete rejection of basic economics that underpins the opposition's completely discredited climate change policy.

The fact is that it will be more efficient and less costly to reduce Australia's pollution through a mix of domestic pollution reduction and international credits. Allowing Australian companies subject to a carbon price - that's the 500 biggest polluters in our economy - to access international abatement opportunities lowers their costs of meeting reduction targets. This is what they are calling for.

International linking also promotes technology transfer to developing countries, supporting an efficient global response to climate change.

This contrasts strikingly with the opposition's subsidies-for-polluters scheme. It is a scheme that is fiscally irresponsible. It is a scheme that shifts the responsibility of paying for pollution away from big polluters and onto every family in Australia.

Given Mr Abbott's opposition to using international offsets, the costs of meeting the target he occasionally professes to support will be much higher. This means tax-payers will be slugged even more so Mr Abbott can pick and choose which polluters will be subsidised. This is made even more ludicrous when you consider there is no difference to the environment where the reductions actually take place. A tonne of carbon pollution saved in China is just as important as a tonne of pollution saved in Australia.

No wonder they can't find a single credible economist nor scientist to support their scheme.