Anthony Albanese MP, Shadow Minister for the Environment, following the release of the Stern report



31 October 2006

ELEANOR HALL: Now, for the political reaction, not only to the Stern report but also to those comments from a key member of the Australian business community about the need for a carbon tax.

We are joined in Canberra by the Environment Minister Ian Campbell and his Labor shadow Anthony Albanese. Gentlemen, thanks very much for joining us. First to you, Minister. Your government has previously ruled out imposing a carbon tax to address climate change. Do the arguments that you have just heard from the IAG CEO, Michael Hawker, change your mind?

IAN CAMPBELL: I think Michael Hawker is, broadly speaking, in tune with the government thinking. He is saying that we shouldn’t act unilaterally in Australia, that we do need, as Nick Stern has said, a global agreement that means that the costs are spread equitably across the whole globe.

I think Michael is very aware of the problem of imposing higher carbon taxes and charges, through trading schemes or whatever, in Australia unilaterally but there is no doubt that we need to work internationally to achieve an effective international agreement which will allow trading to take place across the globe. And the government set that out in its energy white paper in June 2004, that Australia would like to see carbon trading occur but at an effective global level.

ELEANOR HALL: Michael Hawker, though, was very specifically talking about a carbon tax. He wants it put in place today, he said, and that that would create certainty for Australian business—and he is talking about the Australian government setting it somewhat like a ‘reverse tariff’, as he put it, so that you could know in 2035 what tax you’d be paying.

IAN CAMPBELL: I think what Michael was saying is that he didn’t want a carbon tax put in today because it would be adverse to Australia.

ELEANOR HALL: No, he said he wanted it in place today so that the effects would be in the future.

IAN CAMPBELL: I don’t want to verbal him or misinterpret him. He was talking about taxes that would be imposed in, say, 10 years time …15 years … 20 years time.

The Australian people don’t want, for example, the price of petrol to go up. One of the biggest sources of carbon in Australia is transportation. Transportation is about I think 17 per cent, 18 per cent, of the emissions in Australia. If you are going to bring in a carbon tax that would apply to all carbon sources I presume and would be an extra tax, for example, on petrol. I don’t think Australians want that. What Australians want is investment in the solutions, the solutions that will stop carbon going into the atmosphere. That does require multibillion dollars of investments by the government and by industry. That’s one of the reasons this government is investing billions of dollars in developing the technologies, deploying them and leveraging private sector investment to the level of multiple billions. That’s really what Nick Stern is saying in key aspects of his report.

ELEANOR HALL: Anthony Albanese to you—the Labor Party has also been wary of saying it would increase taxes given the dire warnings in the Stern report. Would Labor now look at a carbon tax?

ANTHONY ALBANESE: Well, no, we’d take the recommendations of the Stern review seriously, which are consistent with Kim Beazley’s blueprint on climate change that we released in March of this year.

The Stern review has three essential points. One is there’s got to be a global agreement and that is why we would ratify Kyoto. It’s quite clear that the agreements that will emerge out of 2012 are post the first commitment period of Kyoto [inaudible] an ongoing continuation, the beginning of that is the Kyoto protocol, so systems including the European trading system will continue.

ELEANOR HALL: Anthony Albanese, what about the argument on Kyoto, though, that it is not a global agreement because it doesn’t include the United States, China or Australia?

ANTHONY ALBANESE: Well, it does include China—that’s a fact. China has ratified Kyoto and, indeed, the Stern review points towards China, California and the European Union as the three leading models. China is making significant advances and, indeed, the environment minister was up in China opening a wind farm, partly owned by the Roaring 40s Australian company which got funding through the clean development mechanism of Kyoto because it was a 51 per cent Chinese-owned project.

So the Stern review recommendations are consistent with Labor’s approach: ratify Kyoto; have a national emissions trading scheme. You do need a price signal—is what the Stern review says. We think the most cost effective price signal isn't a tax; it’s an emissions trading scheme.

And the third measure that you need is to have market-based mechanisms such as the mandatory renewable energy target, which needs to be significantly increased because at two per cent, essentially the Australian renewable energy target is dead.

ELEANOR HALL: Minister, what about this point that Anthony Albanese makes that Kyoto, while it may not include the United States, does allow Australia to trade in a global trade … a carbon trading environment? Would it be worth signing on to Kyoto just for that?

IAN CAMPBELL: What we want to do is come up with something effective that actually reduces greenhouse gas emissions globally, and Australia will be an active participant in discussions. In fact we chair one of the key United Nations dialogues which is aiming to create a Kyoto 2 or post-Kyoto arrangement which will in fact bring together developing countries and developed countries and work towards the sort of international trading model that Nick Stern is looking for.

The trouble with Labor’s policy—not to be too political about it—is that they say they want a national emissions trading system and they pretend that that doesn’t mean a carbon tax. But to have a trading system you need a price and the price puts up the price of energy or fuel. So you could try to pretend….

ANTHONY ALBANESE: The market sets the price.

IAN CAMPBELL: Well, the market sets the tax. And the problem is that if you do that unilaterally all you do is drive the emissions away from Australia. It doesn’t actually solve the global problem.

You see the problem of Labor’s policy when you saw, after two years of really hard work, that the Labor Party in New South Wales came up with a national emissions trading model but before the sun set on the day they launched it, both WA and Queensland had withdrawn from it. So those two governments recognised that there were adverse environmental consequences of the trading scheme. It’s not to say that we shouldn’t work very constructively, internationally, on designing a trading scheme that works, that doesn’t drive the emissions out of Australia and into other countries.

I mean, this is a global problem. Forcing emissions out of Australia and into China or forcing emissions out of Australia into Malaysia just means the carbon gets emitted in another jurisdiction, and you don’t help, for example, save the Barrier Reef just by driving the carbon offshore.

ELEANOR HALL: Anthony Albanese, how do you respond to that—the emissions would just go elsewhere?

ANTHONY ALBANESE: Well, that’s an absolute nonsense. What the Stern review makes very clear is that you need those market-based mechanisms if you are going to drive down global emissions. Now, the Howard government is essentially frozen in time while the world warms around it. It is led by climate sceptics in the form of the Prime Minister and the Industry Minister. It questions the science and it is now questioning the economics.

What the Stern review makes very clear is that you can’t solve these problems through one-off funding. What you need to do is establish those economic mechanisms. And it’s extraordinary that you have a government which purports to be committed to markets, which is not only led by climate sceptics, but it would appear, market sceptics as well.

Now, Peter Costello took a proposition to the cabinet some three years ago, to establish a national emissions trading scheme here in Australia. It was supported by Minister Campbell’s department, it was supported by other departments but it was knocked over by sectional interests.

Now, it is about time that this government used this report to say, ‘We got it wrong’ and put the interests of the nation and, indeed, of the planet, before its own narrow political sectional interests.

ELEANOR HALL: Minister, on this point—let’s just clarify with you. The Prime Minister said only two months ago that he was sceptical of doomsday scenarios on climate change and that in his view we had a lot … the Stern report does paint a doomsday scenario and it says the world must act within 10 to 15 years to address this problem. Do you agree with Mr Stern or with Mr Howard?

IAN CAMPBELL: Well, I don’t think there’s any difference between Mr Stern and Mr Howard. It’s just a matter of the inflection you put on it. But one of the things that Mr Stern says—that is absolutely in agreement with the Prime Minister—is that you need to use all existing technologies. One of the ones that Mr Stern looks at very closely is nuclear. And he says one of the things that we have to do—and so obviously something Mr Albanese and Mr Beazley won’t want to look at—is to get government-imposed policy restrictions on using existing technologies out of the way. And he particularly picks on nuclear and looks at some of the constraints on expanding nuclear provisions.

Now, we believe you have to look at all the technologies. You need more solar, you need more energy efficiency, you need more capture of carbon and storage—you’ve got to have that—but you also need, globally, a significant expansion of nuclear. You need more of all the clean energy solutions. And I think one of the problems Labor has—and it’s the bit of the Stern report they won’t address—is the fact that Nicholas Stern is saying, ‘We have got to ensure that existing technologies like nuclear do not have ideologically-based objections placed in their way by people who have ideological problems with these sorts of technologies.’ I think that is something the Labor Party should address.

ELEANOR HALL: We are almost out of time but, Anthony Albanese, is nuclear at least part of the solution?

ANTHONY ALBANESE: Well, Minister Campbell will be taken seriously when he says where the nuclear reactors will go and where the nuclear waste will go. Until such time as he and other government members are prepared to do that, all they are doing is using nuclear as an excuse to do absolutely nothing. And the reason why they are doing absolutely nothing was given up by the Prime Minister himself who said….

IAN CAMPBELL: Well, you can’t say that when you’re just building the biggest solar-powered plant in the world in Australia. That’s [inaudible] the biggest solar energy plant in Australia and in the world.

ANTHONY ALBANESE: If you let me finish.

The Prime Minister himself who said he wasn’t interested in what might happen in 50 years time—that’s the Prime Minister’s position.

And regarding the solar systems plant which is in Victoria, of which the Commonwealth has contributed $75 million to the $420 million project. The company itself says that is only going ahead because of the Victorian renewable energy targets, because they have that market-based mechanism there. And if….

IAN CAMPBELL: [inaudible] we are not doing anything. We’re doing a lot.

ANTHONY ALBANESE: And if Ian Campbell’s mates in Victoria are elected to government, the company itself has said that project may not go ahead.

ELEANOR HALL: And there is obviously a lot further to go in this debate. We are going to have to wind it there.

Gentlemen, thanks very much for joining us. That’s the Environment Minister Ian Campbell, and Labor’s environment spokesman Anthony Albanese.