E&OE….
Topics: Emissions Reduction Fund first auction results
RAFAEL EPSTEIN:
Greg Hunt is the Environment Minister, he’s also of course the Liberal Member for the seat of Flinders down on the peninsula. Minister, good afternoon.
GREG HUNT:
G’day, how are you?
RAFAEL EPSTEIN:
I’m good. Look, I suspect we need to get into a bit of detail, but let’s try and let’s try and keep it as simple as we can.
GREG HUNT:
Sure.
RAFAEL EPSTEIN:
Just trying to make it understandable for both myself and everyone else, am I right in saying that you’ve purchased a fifth of the emissions you need to purchase using a quarter of your money? Is that roughly right?
GREG HUNT:
No, it’s completely false.
RAFAEL EPSTEIN:
Okay, go for it. Tell me what I got wrong.
GREG HUNT:
So, let me present it, if that’s okay Raf.
RAFAEL EPSTEIN:
Yeah.
GREG HUNT:
Rather than beginning with some (inaudible) what’s the Labor Party’s presentation.
RAFAEL EPSTEIN:
I was just going off the maths. I didn’t get that from Labor, but go for it.
GREG HUNT:
These are the facts – that obviously we abolished the carbon tax and electricity prices dropped. We then passed the Emissions Reduction Fund and the Labor Party and many of their fellow critics said that we’d never get any demand under the Emissions Reduction Fund. What it is – it’s an incentives-based payment through an auction process – a market-based mechanism – to find the cheapest emissions reduction project in the country; directly cleaning things up.
What’s happened today is the Clean Energy Regulator who’s conducted the auction has announced that 47 million tonnes of emissions reductions projects have been awarded. That’s four times the total volume of emissions reduction under the entire carbon tax period from just the first auction. It comes at a price per tonne of $13.95, which is less than one-ninetieth, or about 1.1 per cent of the average price of emissions reductions of $1,300 under the carbon tax.
So, in other words, massively more reduction in emissions than under the carbon tax at a fraction of the cost, 144 projects around the country and we’ll achieve our outcomes and I couldn’t be more delighted. A much higher volume, maybe ten times higher than we had expected.
RAFAEL EPSTEIN:
Okay.
GREG HUNT:
At a lower price than we’d expected and we’ll achieve all of our targets and we’ll beat our targets and do it significantly.
RAFAEL EPSTEIN:
Just tell me how my maths is wrong, and I’m being genuine here Minister, I’m just trying to clarify. If you need to reach 236 millions of – you need to purchase 236 million and you’ve purchased 47 – that’s about a fifth right?
GREG HUNT:
But your assumption about the 236 is wrong there.
RAFAEL EPSTEIN:
Oh okay.
GREG HUNT:
Latest advice we’ve got is that our gap – so for listeners who are trying to deal with this complex discussion…
RAFAEL EPSTEIN:
Yeah.
GREG HUNT:
…the gap that Australia needs to fill over the coming years is dropping all the time.
RAFAEL EPSTEIN:
So what’s the estimate today then?
GREG HUNT:
The latest advice that I have from the department is that we are some millions and millions of tonnes lower in our emissions just for this year than had been predicted only recently and that will flow through.
RAFAEL EPSTEIN:
So let’s keep it simple – is that 47 million, what, a quarter, a third of what you think we need? What do you think it is?
GREG HUNT:
Look, the latest projections – the updated projections will come out before the Paris conference, but what I can say with complete confidence is that just through the Emissions Reduction Fund we’ll achieve our – the necessary targets, we’ll achieve the emissions reductions. 47 million tonnes is a stunning outcome; four times greater than the whole carbon tax.
RAFAEL EPSTEIN:
And I do want to try and get this simple Minister, but if I am trying to say, okay, well, how much has the Abbott Government achieved, can you give me some figure? I mean, I think, you’re welcome if you want to make the comparison between Labor’s scheme and yours, but in my mind I want to know how much of the pie have you taken care of? Is 47 million a fifth, which is what I thought, or is it a third, half of where you need to get to – what is it?
GREG HUNT:
Well, it’s well more than the percentage that we need. So what you see is that if your target comes down to 180 million tonnes you’re well ahead of where you need to be, so we’ve done more than a quarter of that.
RAFAEL EPSTEIN:
So you think it might be just over a quarter?
GREG HUNT:
Look, I won’t give a final figure because the target that – the task is dropping all the time, because we continue to beat our emissions projections. What does this say; it says that if you want to do a proper comparison…
RAFAEL EPSTEIN:
Yeah.
GREG HUNT:
…less than 12 million tonnes of emissions reduction under the entire carbon tax period. This is just the first auction. It’s four times greater in terms of real emissions reduction project. And I suspect your listeners may be very interested in terms of what sorts of things that we’re doing. Protection of native forest in New South Wales, regeneration of native forests…
RAFAEL EPSTEIN:
Sure.
GREG HUNT:
…in the Cobar area, regeneration of bush with bimblebox and mulga.
RAFAEL EPSTEIN:
This is effectively what you’re purchasing is what you mean.
GREG HUNT:
That’s correct. These are the sorts of projects that we’ll be investing in. There’s been a competitive auction and it’s just a stunning outcome.
RAFAEL EPSTEIN:
Can I ask, that 47 million tonnes, is that all delivered before the end of the decade? Current policy, both parties talks about the end of the decade; is that all going to be delivered before the end of the decade?
GREG HUNT:
No, you have a balance. The overwhelming majority will be, but you have a balance, because this is a policy that runs out over the next 50 years.
RAFAEL EPSTEIN:
Sure.
GREG HUNT:
Now some of the longest contracts here are ten years.
RAFAEL EPSTEIN:
But just sorry Minister, can I stop you there? Overwhelming balance, I’m just not sure what that means. I mean if you want to compare that to what Labor did, I have no idea if your 12 million figure around Labor is correct, but I’m more than happy to take that.
GREG HUNT:
Well these are the official national statistics.
RAFAEL EPSTEIN:
Okay, great. But the 47 million is over how long, I mean…
GREG HUNT:
Well this is the first auction…
RAFAEL EPSTEIN:
Yes.
GREG HUNT:
…and so that will increase with each successive auction. In just the first one we’ll reduce the emissions that Australia would had otherwise put into the air by 47 million tonnes…
RAFAEL EPSTEIN:
But if it’s over 50 years obviously that wouldn’t be a great gain.
GREG HUNT:
No this is over on average seven years. So the vast bulk of that will be delivered in the coming years. But the whole point here is we’re actually reducing emissions on a grand scale at a low cost without an electricity tax and that’s the big picture. And the Labor Party and many of their fellow critics said look this will never work, you’ll never get…
RAFAEL EPSTEIN:
Citigroup’s another major institution. Global Bank they also don’t think that you’re…
GREG HUNT:
Significant…
RAFAEL EPSTEIN:
…doing the right thing.
GREG HUNT:
Well they’re wrong. If they want to tax Australian families with higher electricity prices…
RAFAEL EPSTEIN:
I’m not sure Citibank have a policy, I think it’s just an analysis.
GREG HUNT:
I don’t – but a lot of these groups said, gosh, you know, they won’t get two million, they won’t get three million tonnes, in fact we’ve got 47 million, and so the people who said there wouldn’t be enough are suddenly saying oh maybe there’s too much.
What we’ve got here is a huge number, 144 emissions reduction project right around the country from protecting forests, replanting of bimblebox, of mulga, we’ve got reforestation of cleared land, you’ve got the collection of methane from waste. We’ve got soil carbon.
RAFAEL EPSTEIN:
Can I…
GREG HUNT:
Real, practical outcomes doing the things that Australians would want rather than an electricity tax. In short, we all…
RAFAEL EPSTEIN:
Can I just continue?
GREG HUNT:
…want to cut emissions and we get more for less and it’s working.
RAFAEL EPSTEIN:
Greg Hunt is with us. He’s the Environment Minister. Interested in what you make of what he has to say – 1300 222 774. He says his program’s delivering more and more cheaply than the alternative. Minister, in the middle of the year you’ll release ambition for beyond the end of the decade – I won’t ask you to reveal what that is of course, I just wonder if often what comes up is we emit more per person.
So that even if we were to deliver our target at the end of the decade that you’re proposing we’re still a bigger emitter per person than every other country, US, UK, China, India. Is that an important part of the debate for you, is that one of the principles that guides what you aim for?
GREG HUNT:
What I am aiming to do is reduce our emissions as a country and that’s what we’ve done today. Also to meet our targets, Australia was one of the countries that met their targets…
RAFAEL EPSTEIN:
Yes.
GREG HUNT:
…where many others failed for the first round of international targets. We are now – and today makes it absolutely clear, going to meet and beat our targets for the period to 2020 and what it also does is it lifts the speed limits of what we can do for the future. And there are very few…
RAFAEL EPSTEIN:
…ask you about the principles because emissions per capita, there’s another figure which is how much we emit per bit of GDP, per unit of GDP. On both of those measures we’re much higher than the rest of the world.
GREG HUNT:
No that’s false. On the first one that is true…
RAFAEL EPSTEIN:
Okay.
GREG HUNT:
…that Australia’s emissions are higher than many other countries in terms of per capita. I think it’s important to acknowledge that. Our emissions per unit of GDP are absolutely some of the best in the world.
I know Origin Energy released figures on this recently which were seen as a real game changer that Australia is one of the world’s most efficient users. We export goods to many places in the world so we are bearing the carbon cost for many other countries. European ports are goods from China and India so they are off-shoring a lot of their carbon footprint.
RAFAEL EPSTEIN:
I understand that but I suppose I’m after what the principle is that guides your decision. You sit down with the Prime Minister, you sit down with those who advise you on where we can get to, is the principle to get down our emissions per person, is the principle to stop warming by more than two degrees? I just wonder what your guiding principle is?
GREG HUNT:
Well the first thing is to help the world get towards the target of ensuring that we achieve the outcome of ensuring that there’s no two degree warming…
RAFAEL EPSTEIN:
So that is a guiding principle.
GREG HUNT:
That’s the first thing. And this is a progressive project. I think that the world will make very significant progress in Paris and we’re going to be a real part of that. And today means that we will not only achieve our targets not but the speed limits are lifted for what we can achieve in the period beyond 2020.
So this is the moment where, you know, given that most – or many other countries have failed on either their first or second round of Kyoto targets but Australia’s going to achieve them. And remember we’re coming in at minus 13 per cent of our 2005 emissions by 2020. That’s a pretty significant figure for a country which has grown its economy, grown its population…
RAFAEL EPSTEIN:
Not everyone – I’m happy to talk about those targets but there’s – you’ll know of these criticisms that Kyoto – we got a generous deal and that we weren’t nearly ambitious enough for – to the end of the decade and there was an unexpected downturn in manufacturing and an unexpected drop in demand for electricity and that’s what’s driving our ability to meet the target, not any policy directed by government.
What do you make of that criticism that it’s not really what you’re doing, it’s the unexpected economic impacts of just what’s happened in the last three or four years?
GREG HUNT:
Well I’d start by saying 47 million tonnes from the first auction. That’s the exact quantifiable impact of what we’ve done and 12 million tonnes or a little bit less was the exact quantifiable impact of a $15 billion carbon tax. And so – there are other factors of course.
And my whole point has been that we can achieve our targets without a punitive measure but through investment and incentives and this is a message which doesn’t just go around Australia, which doesn’t just go to the ALP to say, hey do you really want to whack families with higher electricity and gas prices.
It’s a message which goes around the world which says that this UN clean development mechanism approach that Australia adopted can be profoundly more effective than the carbon tax which many in Europe say won’t produce a single tonne of emissions reductions between now and 2020.
RAFAEL EPSTEIN:
Just briefly Minister, if people want to see this data, it’s produced by – just remind me?
GREG HUNT:
It’s on the Clean Energy Regulator’s website. If you just Google Clean Energy Regulator, put them in…
RAFAEL EPSTEIN:
Clean Energy Regulator website.
GREG HUNT:
Website. And there’s exhaustive data which outlines the nature of all of the projects, the value of the contract, the average price per tonne of abatement, so those things are there to be considered.
RAFAEL EPSTEIN:
Okay. Minister, I appreciate your time. Thank you for taking us through the detail.
GREG HUNT:
Cheers, thanks, bye.
RAFAEL EPSTEIN:
Greg Hunt, the Environment Minister in Tony Abbott’s Government.
(ENDS)