Topics: Labor’s failed carbon tax
It seems we are using less electricity – probably because we can’t afford it – and the high Aussie dollar have helped put Australia within a footy kick or so of the 2020 emission reduction target, although there’s a lot more work to do.
Greg Hunt is the Federal Environment Minister, and joins me now. Thanks for your time Minister.
Good morning Matthew.
So, where are we at with that? And really, why is it a reduction in electricity demand – that means less coal being burnt presumably, therefore fewer emissions?
Well look all up we’ve been on a reasonably long-term trend of emissions reduction. We hit a peak in about 2006-07, and over the next five years we dropped 50 million tonnes, or 10 million tonnes a year.
Carbon tax came in and we dropped three million tonnes or 1.5 million tonnes a year – one-sixth of the rate of reduction – which is a little bit troubling for those that are advocates of the carbon tax because the rate slowed quite dramatically.
But what matters is that our emissions are down below not just 2000, but 1990 levels already. We’re well on track to achieve our 2020 targets. And if you look at the carbon tax period, the cost per tonne was over $5300 for each tonne of emissions reduction.
So, the real point here is you can do it without a massive electricity tax. And as you say, electricity prices are high. If the ALP wants to bring back a new electricity tax I suspect now is the time they ought to set out exactly how much they’ll be increasing household bills by.
Now, your Direct Action policy is one in which 130 polluters – and we’re talking large companies – would have to pay, will have to meet emissions guidelines, basically. Where are you at with that? Have they been implemented yet? And are they being followed?
So there are two stages to this. The first is that we introduced an Emissions Reduction Fund. That was passed by legislation in October.
We will have our first auction in the coming months, and so we’ll then buy the lowest-cost emissions reduction – and that could be cleaning up power stations, introducing energy efficiency on a broad scale, capturing carbon in soil or trees, and farmland.
And then the second stage, which will see what you might call caps or limits for the largest 130 firms, comes into being on 1 July 2016. And the baselines, or the caps, or the standards will be established later this year.
So we’re well on the way, and firms are already preparing. And the beauty of it is it’s reducing emissions without an electricity tax.
Now the Senate has passed the first part of that as I understand it, are you confident of getting support in the Senate to get it all through?
Well actually what’s sometimes known as the safeguards mechanism, which is the caps on the 130 firms, that was also passed as part of the legislation; so we just simply now set the standard. But both parts have been passed by legislation, and then we set the standards for the individual firms.
So, we’re in very good shape. I think it took the previous government some years to get the carbon tax through, and then of course it was an expensive $15 billion, $5300 per tonne electricity tax, effectively – which was rejected by the people.
We got ours through in just over a year of coming into office and, importantly, firms are lining up and preparing to reduce emissions.
And again, and again, and again, it’s this point that we do it without an electricity tax and a gas tax, because South Australians are paying some of the highest electricity prices in the developed world, and they don’t want to have another five, ten, fifteen per cent hit.
And I suspect that now’s the time just over a year and half from an election, for Mr Shorten to probably set out how much do they really want to hike electricity prices by again? Because we think, and we’re convinced, that you can do this without an electricity price hike.
And it seems to be working alright so far. Now Minister while I have you, you’d be very well aware of the bushfires in South Australia I’m sure…
Oh yeah, obviously. Yep.
…And as Environment Minister you would be interested to know our first guest this morning after the 9 o’clock news was David Packham. I’m not sure if you’re aware of David, but he’s a fire management consultant and a bushfire consultant as well. He’s given evidence at inquests in the past, and to the Victorian fires too I think over there.
So, he made the point that we are allowing our natural bush, if you like, to grow, natural scrub, to grow under bodies like here in SA the NRM Board – the Natural Resource Management Board. And while that fuel load increases, obviously the fires will be more intense, they will spread faster.
What’s your view on all of that, as Federal Environment Minister? Should we say this traditional scrub, look, there’s a place for it in certain areas, certain reserves, but farmers should be allowed to clear their land if necessary without going through the NRM Board?
Look, I think the best advice came from the Victorian Royal Commission into the Black Saturday fires. They noted that fuel reduction burning had been less advanced than it should have been in the years prior to the Black Saturday bushfires. Of course, Australia, massive fires, this is just part of the natural history, and then you overlay human events on top of it, and that can make it worse.
But they made a really clear recommendation that the states should be overseeing significant and appropriate fuel reduction burns. I wouldn’t want to comment on the situation in South Australia, because I’d just be speculating where I don’t have all of the facts.
But the Victorian Bushfire Royal Commission was absolutely clear that where there are areas that border settlement and housing, and sort of reasonably intense farmland, there has to be a focus on mitigating and reducing the fuel loads, and that appropriate, well-managed bushfire reduction through fuel reduction is absolutely essential.
Indeed. Alright. Minister, thank you for your time today.
Take care. Thanks Matthew.
Federal Environment Minister there, Greg Hunt.