Topics: Direct Action, China Emissions Trading Scheme, electricity prices
Well joining me now is the Environment Minister Greg Hunt. Mr Hunt, thanks so much for your time.
It’s a pleasure Laura.
Do you agree – if China does impose this cap and trade scheme, will it be a game-changer?
Well we are actually reducing our emissions by 26-28 per cent. We’re doing it without a carbon tax, we’re doing it without higher prices on electricity and any action by any country is welcome.
China’s on track to be plus 150 per cent on its emissions from 2005 to 2030. We’re on track to be minus 26-28 per cent.
Any form of action by any country is welcome, but for us we are getting the job done. We’re doing it without a carbon tax, we’re doing it by lowering electricity prices.
I know Mr Shorten will use any excuse to try to increase electricity prices but we’re not, we’re decreasing them.
He wants to increase them and we’re reducing emissions in one of the most effective ways in the world.
This is a huge leap forward for China, isn’t it? Xi Jinping is set to make this announcement in the United States.
And the United States in recent times also has introduced cap and trade – emissions trading schemes – not economy-wide but…
No it hasn’t. It’s rejected – the opposite…
It’s done precisely the opposite…
There are two fledgling schemes in the United States. And at a national level it’s been rejected.
In Canada it’s been rejected. In Japan it’s been rejected.
And in Australia you have the ALP which twice went to elections pledging not to introduce – or to terminate – a carbon tax – although after the last election they voted to keep a carbon tax.
We’ve got a system which is reducing emissions. The World Bank has just adopted the equivalent of an Emissions Reduction Fund – their Pilot Auction Facility.
What we see is that that’s funded by the United States and Germany, Sweden and Switzerland. It uses the very same type of model as the Australian one of purchasing emissions reductions.
We’re reducing emissions. We are doing it in one of the most effective, most comprehensive ways of any country in the world.
And if China takes action to reduce emissions that’s good. But it’s up to each country to work out how they do it.
But the choice here in Australia is very clear – lower emissions and lower electricity prices under the Coalition and arguably higher emissions and certainly higher electricity prices under Bill Shorten.
And if he wants to use this as his excuse for higher electricity prices he should be upfront with the Australian people.
Australia is taking its 2030 target to reduce emissions to the Paris conference next month. It is a 26-28 per cent reduction on 2005 levels by 2030.
If China does go ahead with this, does it still leave Australia in about the middle ground or are we starting to fall behind in terms of comparable countries reducing their emissions?
Well if you refer to China you’re referring to a country with up to a 150 per cent increase in emissions – a quarter of the world’s emissions coming from China and that is set to increase by 150 per cent from 2005 to 2030.
I hope that they take whatever action will help reduce emissions. I’d be very interested to know what percentage of permits are given away for free – it’s 99-100 per cent in the pilot schemes and that may well be the case here.
But for us, we’re reducing emissions. Real projects around the country – 47 million tonnes, 144 projects, an average price of $13.95 per tonne of emissions reduction, compared with over $1300 under Labor. And we’ve reduced the price of electricity.
Labor wants to increase the price of electricity with a far less effective scheme in terms of emissions.
So they give you the worst of both worlds. We’re doing the right thing by the planet and the right thing by the Australian families.
Malcolm Turnbull did say this week – and his history on this matter cannot be ignored – that he supports Direct Action.
He says it is absolutely working. But you and Malcolm Turnbull did once support an emissions trading scheme.
With China moving in this direction and China being our largest trading partner, is it sensible for Australia to rule out an emissions trading scheme in the future?
Well we are not having an ETS – or what really is a carbon tax with a floating price – under the Coalition.
We have a scheme which is arguably the best, most effective scheme in the world.
We are seeing The World Bank adopt a similar scheme. We’re seeing reverse auctions in South Africa, the ACT and Brazil.
We are seeing the United States, Canada, Japan all reject emissions trading schemes.
And has the European scheme been an effective scheme? I think many people in Europe would say it’s not achieved its goals, it’s not achieved emissions reductions, it has been an expensive scheme.
By comparison we have a highly efficient, market-based auction process where we buy the lowest emissions reductions. And real emissions reductions are occurring without electricity price rises.
That’s what good policy is about – using the market to reduce emissions without increasing electricity prices.
And the alternative under Mr Shorten is they’re going to drive up the price of electricity, again and again and again.
Why do you think China is not adopting the Direct Action scheme? Why do you think it is going down the path of a market-based mechanism like this?
Well, with respect, there’s a fundamental flaw in your presumption.
There are different forms of market mechanisms. The most pure form is an auction, which is what we have.
Another version is an emissions trading scheme – although in essence it’s a tax, where you charge a price for electricity consumption.
Whether or not they actually levy a cost is a different matter because you can call something an ETS – but the pilot schemes that the Chinese have had have given 99-100 per cent of permits or emissions away for free.
So what we’re focussing on is actually reducing emissions.
Minus 26-28 per cent in Australia. Plus 150 per cent in China. Hopefully they take whatever measures they can to reduce emissions.
But if you can have lower emissions and lower electricity prices in Australia, that’s a successful policy.
The ALP knows their carbon tax was a failure – why else did pledge to terminate it?
Well it was a political failure as much as anything.
Why did they pledge to terminate it?
Can I just ask you one final question, have you spoken to your Chinese counterpart about this?
Did you know this announcement was coming? Were you given a heads up?
Look, China has long said that they would take their scheme so there is no actual surprise. So over the years I have spoken with Chinese officials.
On any individual day they will make their own announcements. But I suspect that they will be communicating with the Department of Foreign Affairs and Trade, which is the usual way that these things occur.
But at the end of the day any emissions reduction by any country is welcome. But we have a scheme that the World Bank has adopted – which is remarkably similar – where we go, we clean things up, we do it without hurting families and pensioners.
And what the planet cares about is – are we reducing emissions, and we’re doing it.
And what Australian families care about is – are we reducing their electricity prices, and we’re doing it.
And unfortunately Mr Shorten wants to turn around and do the opposite.
Environment Minister Greg Hunt thanks so much for joining us – from Torquay no less, a beautiful part of the world – thank you.
Thanks very much.