30-April-2009
Portfolio Media Releases, Emissions Trading Scheme
Topics: Emissions Trading Scheme and the Pearce Review.
DAVID SPEERS: What changes after seeing this report will you be demanding to the Government scheme?
ANDREW ROBB: The onus is in many respects on the Government. Kevin Rudd said before the last election, on many occasions, he said he would bring in a scheme which would result in deep cuts to emissions and would not disadvantage our export and import competing industries. Now if they come up with a scheme which does that we would be supportive but the thing is the scheme they have on the table at the moment fails on both counts, it would lead to tens of thousands of jobs lost, a lot of discouragement for investment, a lot of temptation to take business overseas and it would not do much about CO2 emissions. So they have got to come up with changes. What the report does confirm that we had presented to us yesterday is that they have not explored a lot of other options that are on the table.
DAVID SPEERS: Well I want to look at some of those options. What are some of those options that aren’t being looked at?
ANDREW ROBB: Well there is a scheme called the hybrid scheme which is McKibbin, it’s Warwick McKibbin, a member of the Reserve Bank, many years of experience in all of these sorts of scheme developments. He has taken the best of a Cap and Trade type scheme and the best of a Carbon tax and he put them together. It is quite complicated to explain.
DAVID SPEERS: This is the Canadian model?
ANDREW ROBB: No, that’s another one again. The Canadian model is a cap and trade which preserves a lot of the balance sheets of companies so they can actually reinvest in innovative low carbon technology. So there’s two schemes then you have a carbon tax by itself. All of those David Pearce said, they all have very strong merit. What should have happened he said, over the last 18 months, they should have, when they modelled their narrow scheme, they should have modelled all these others and empirically established what is the best. The thing about this is it is the biggest structural change. deliberate structural change in our economy probably ever. So to rush headlong into a scheme, not consider all these legitimate and significant alternatives, not consider what effect their scheme will have in the next 20 years on jobs. They looked at 50 years but they did not look at the next 20 years.
DAVID SPEERS: Alright but your suggesting there are some simpler ways or some other ways of reducing emissions that aren’t being looked at. You are talking about capturing carbon in the soil for example. Are you saying you could beat, have a stronger target than the Government’s 5-15% by 2020.
ANDREW ROBB: Well what David’s report has confirmed is that there is more than one tool in the climate change toolbox. He has confirmed that, he has said sure, you need a price of carbon and there are lots of ways of doing that. A lot more serious analysis needs to be done and it can be done quickly to establish what’s the best way. The government should do that for one but secondly he is saying there are all these complementary measures like improve the energy efficiency in the commercial building sector, store a lot more carbon in soil in all sorts of ways just with standard agricultural practice no revolution here. Now what he has shown is that you can have a mix, a scheme can involve a whole mix of approaches.
DAVID SPEERS: With a higher target?
ANDREW ROBB: With potentially a higher target. But more than that it probably means you can start immediately and have some things happening immediately which start to get you towards a target. At the moment, the Government has basically wasted 18 months and has come up with a dud.
DAVID SPEERS: Well just on your plan, just to be clear on this, you are no longer saying an emissions trading scheme is necessarily the way to go.
ANDREW ROBB: No, we are saying you do need a price of carbon, I mean we were out there with a scheme 12 months before the Government.
DAVID SPEERS: But it may not be a cap and trade, it might be a carbon tax.
ANDREW ROBB: It could be one of any of four or five might be the best way and that work can be done quickly, this is not a question of pushing it off into the never never.
DAVID SPEERS: Well this sounds as though it takes the Coalition back to, as my understanding was your policy was in support of the Cap and Trade Scheme. You are now saying not necessarily.
ANDREW ROBB: Well what we are saying, the Government, if the Government is to come up with the most robust scheme they should have at the very least, this is what the report is saying. We haven’t established a position yet on any of this.
DAVID SPEERS: But you are open to a carbon tax?
ANDREW ROBB: This is why we got David Pearce to have a look at this and said give us advice. What he has said to us is that the Government should have done these things. We need to consider what he has said to us. We are also looking at what the Senate inquiry, there is still a major one that we instigated with the Greens. That’s not finished yet. A lot of new ground is being tilled there.
DAVID SPEERS: So your mind is very much open.
ANDREW ROBB: Our mind is very much open. Of course we have been doing a lot of work on this but when we have finished, when we have seen what has come out of the Senate. When we have finished looking at what David Pearce has advised, we will then say to the government, if they haven’t made changes by then, this is what we think should happen and that is when we get into the substantive debate in June.
DAVID SPEERS: Ok, because the Government, this timeframe is pressing and the Government basically wants to know what you are demanding but we won’t know that for a couple of months.
ANDREW ROBB: Well, the thing is, this is a ploy, this is a political ploy, the bottom line is now for months and months, almost daily, captains of industry have come out and said this project is in jeopardy, 10,000 jobs in jeopardy here, 5,000 here, 4,000 there, we will be overseas with this, we will be uncompetitive, you are putting a tax on us when none of the rest of world are facing it, what are you doing. Now they are not responding to industry. Sure we have a responsibility to work through all this and recommend what should happen but the onus is on the Government to respond to the major and legitimate concerns that are being voiced daily by industry and have been for several months now.
DAVID SPEERS: Just finally Andrew Robb, the State and Territory leaders are meeting in Tasmania today, one of the things they are talking about is a new tougher energy efficiency standard for new homes, a 6 star energy rating. Do you think that would be a good idea.
ANDREW ROBB: Well I would have to see the detail but certainly there is a place for a whole suite of measures. I suppose this has been our point, just don’t focus on an ETS to do all the heavy lifting. So there could well be merit in it, I would need to look at it but certainly there is a lot of scope with homes, with the commercial building sector to make substantial energy savings which reduces CO2.
Media contact: Stuart Eaton, 0433 298 620.