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The city of my childhood. The city where I received such a great education. The city where my parents gave me values for a lifetime. Today we celebrate the legacy of a remarkable Australian, Don Dunstan. Our nation has never seen a leader like him. Today many remember Dunstan primarily for being colourful. But we should also remember him for being courageous and clear-minded. Dunstan saw our nation not just as it was, but as it could be. Dunstan built a community based on innovation, creativity and ideas. I was shaped by the Dunstan era and its spirit of principled reform. Let me assure you, I won’t be wearing pink hot pants into parliament any time soon! But I do profoundly share his belief that we can envision a better future and embrace the reforms that will help take us there. Dunstan understood that such leadership involved a choice between two pathways. Defence of the status quo, based on caution and fear. And an optimistic faith in the capacity of our people to embrace change. I hold that optimistic faith to the core of my being. It is my belief. It is Labor’s belief. Tackling the big challenges and building a nation of opportunity and prosperity for all. We’ve done it before. Postwar migration and the Snowy scheme. Gough Whitlam’s renewal of our social fabric. Hawke and Keating opening our economy to the world.
Today we must embrace another moment of decision for the future of our nation: a decision to cut carbon pollution and build a clean energy economy for the 21st century. Neither of the extremes in Australian politics can deliver this reform. The Coalition has surrendered itself to fear-mongering and denying the power of markets. The Greens are not a party of government and have no tradition of striking the balance required to deliver major reform. Like the economic transformation of the 1980s, this is a reform that can only be handled in the progressive Labor tradition. We did it in the 1980s with the social wage and industry assistance that eased the path of structural change. We will do the same this time, with generous assistance for households and support for business to adapt. In all of this, we draw strength from enduring Labor values: Protecting jobs – always our first commitment. A sustainable environment for future generations – an environment with less carbon pollution. Reform with equity, looking after those who need a helping hand. And accepting a scientific world-view in a community of reason. Friends, the second US President John Adams once famously said that “facts are stubborn things.” No opinion poll can change the fact that climate change is real. It is caused by human activity. And we must cut carbon pollution. In a nation rich in fossil fuels, I wish it were not so. But it is. Greenhouse gas levels are one-third higher than before the Industrial Revolution, and higher than at any time in the last 800,000 years.
As a result, global temperatures have risen 0.7 degrees celsius over the past century and continue to rise. The last decade was the world’s hottest on record, warmer than the 1990s which were in turn warmer than the 1980s. In fact, globally 2010 was the equal warmest year on record, tied with 2005 and 1998. 2010 is the thirty-fourth consecutive year with global temperatures above the 20th Century average. In Australia, average temperatures have risen almost one degree since 1910, and each decade since the 1940s has been warmer than the one before. That warming is real. Its consequences are real. And it will change our lives in real and practical ways. More extreme bushfire conditions and droughts. Falling crop yields. Loss of species. Increased cyclone intensity. More days of extreme heat. Coastal flooding as sea levels rise. Bleaching of our coral reefs. And a substantial decline in alpine snow cover. Indeed, Professor Garnaut’s latest report indicates that the need to act is greater than ever. And the scientific consensus is stronger than ever. Given these realities, I ask who I’d rather have on my side: Alan Jones, Piers Akerman and Andrew Bolt. Or the CSIRO, the Australian Academy of Science, the Bureau of Meteorology, NASA, the US National Atmospheric Administration, and every reputable climate scientist in the world.
It is deeply ironic that as the scientific evidence mounts, the Coalition’s position grows more extreme with every passing day. Mr Abbott doesn’t care about climate change because he doesn’t believe in climate change. Yes, he says the right thing to the wider community. But put him on talkback radio and his true opinion emerges. It is no wonder that Mr Abbott told his party room not to talk about the science. Because half the Coalition party room consists of sceptics, deniers and opportunists. While decent men and women of the small ‘l’ liberal tradition like Judi Moylan, Mal Washer and Judith Troeth tear their hair out in frustration watching a hard-won consensus evaporate in a cloud of denial and fear. Friends, that consensus was the product of long years of deliberation and debate. The first warning by a senior world leader came from none other than Margaret Thatcher – a trained scientist who knew what was at stake. At the 2nd World Climate Change Conference in 1990, Mrs Thatcher warned that: The danger of global warming is ... real enough for us to make changes and sacrifices, so that we do not live at the expense of future generations. That conference led to the Earth Summit in Rio in 1992 and Kyoto in 1997 moments of hope, lost to inaction and delay. There have been some brave attempts at reform along the way. As Environment Minister, Senator Graham Richardson first proposed a climate change response in 1989. His successor, David Kemp along with Peter Costello, tried again in 2002. In 2007, Prime Minister Howard accepted the Shergold plan to establish an emissions trading scheme. Both Labor and the Coalition went to the 2007 election pledging to price carbon. That consensus has now been destroyed. And friends, let’s set the record straight about the 2010 election. Yes I did promise that there would be no carbon tax.
I also said to the Australian people that we needed to act on climate change, we needed to price carbon and I wanted to see an emissions trading scheme. Now, if I'd been leading a majority government I would have been getting on with an emissions trading scheme, just as I promised the Australian people. As it is, in this minority parliament, the only way I could act to price carbon was by working with other Members of Parliament, or else do nothing. I had a stark choice: do I act or not act? I chose to act. The Government’s plan means we start with a fixed carbon price for a temporary transitional period a plan that puts a price on carbon from day one. We will still have an emissions trading scheme but we will get there by a different route. Our carbon pricing model will give industry time to adapt in a steady and deliberate manner. It will generate revenue to assist households and businesses make the transition. And it will provide a real incentive for firms to reduce their carbon pollution. The important thing to know is that from 1 July 2012, carbon will be priced in the Australian economy. The journey of transformation will begin. Friends, I chose action over inaction because of this simple truth: If Australia does not adopt a carbon price in 2011, we probably never will. This is the year of decision. Action versus inaction. Acceptance versus denial. Setting Australia on the path to a high skill, low carbon future. Or leaving our economy to decay into a rusting industrial museum. That is the choice we face. Action will protect jobs.
Inaction will cost jobs. Tony Abbott will cost this nation jobs. In his landmark report, Lord Stern noted that while action has its price, but the cost of inaction will be far greater: “The costs of action to the global economy would be roughly 1 percent of GDP, while the costs of inaction could be from 5-20 percent of GDP.” [UK Government, Stern Review: The Economics of Climate Change, 2006] As Prime Minister of Australia, I will not trifle with our nation’s future. I will not expose our people to such risks. We cannot afford to be stranded with an outdated high-emissions economy. We can’t freeze our economy in time, any more than we could lock ourselves behind tariff walls while the world changed outside. I don’t want us to wake up in ten years time lumbered with a high carbon economy when the rest of the world has moved on and then scramble to catch up. Our nation is well equipped to make the transition. We have an abundance of natural resources like wind, natural gas, solar and geothermal. For example, the highest average solar radiation per square metre of any continent in the world. We have an agile, innovative business sector tempered by three decades of exposure to global competition. We have a talented workforce ready to embrace the jobs of tomorrow. As Deputy Prime Minister, I often spoke about the opportunities that will come with a low carbon economy, like my address to the Green Skills Forum in 2009. It is a conviction I hold even more strongly today as countries like China plunge headlong into new industries like solar energy while we delay and hold back. Friends, the dignity and value of work lie at the very heart of everything my Government stands for.
That is why climate change is not just a debate among economists and scientists. Every Australian family has a stake in what we do. Delay will cost them jobs. It will cost them jobs through the impacts of a changing climate. Like the crop failures that will come with longer and harsher droughts. Or the loss of tourism jobs that will come with the bleaching of our coral reefs. Inaction will also cost jobs because emission-intensive economies will become uncompetitive in a low carbon world. In the quest for comparative advantage, investment will flow towards those countries that can offer more output for fewer emissions. Inaction will cost jobs. Action will support jobs. Friends, action on climate change means creating new jobs for the future. It means saving and transforming existing jobs. It means re-skilling workers for the future. We will see new job opportunities in clean energy generation. Electric and hybrid cars. Manufacturing clean energy equipment. Energy efficient construction and retro-fitting existing buildings. Carbon capture and storage. Today’s workers will find themselves in different industries and different settings. Welders and steel workers will build and maintain large-scale solar power plants. Plumbers and electricians will be reskilled to install solar hot water systems and solar panels. And there will be new jobs too. Just as in the 1960s, the South Australian community could never imagine the jobs in tourism, fine food and wine, the film industry and the arts that lay just around the corner.
Or back in the 1980s that the ingenuity of markets would create enterprises like Google and Facebook that would change the world. In a similar way, clean energy will open up opportunities we are only just beginning to imagine. Those opportunities begin with that simple but momentous decision: Putting a price on carbon. Friends, a price on carbon is the cheapest way to drive investment and jobs. A low carbon economy will be more efficient and more productive. It will change behaviour right across the economy, driving innovation and creativity. Like the dynamic benefits of tariff reform, a market in carbon will not only cut carbon pollution but make the economy more efficient as a whole. The countless decisions needed to transform our economy cannot – and should not – be made by government decree. They can only be made by individual firms calculating how best to position themselves for a low carbon future. By contrast, the Coalition wants to pick winners from a central bureaucracy located in Canberra. More Karl Marx than Adam Smith. Their “direct action” approach was a short-term fix cobbled together when Mr Abbott unexpectedly became Opposition Leader. It is a threadbare piece of policy. Never intended to be implemented. Merely a fig-leaf for denial and delay. No Liberal of consequence can support it. No economist of standing does support it. The Coalition’s direct action method abandons any commitment to market forces. It will increase emissions by 17 per cent, not the promised 5 per cent cut. And it will cause a $30 billion black hole that the Federal Budget could never sustain.
Direct action simply taxes families and puts that money in the hands of polluters, with government rather than markets picking winners. Malcolm Turnbull nailed the argument when he said: “Having the government pick projects for subsidy is a recipe for fiscal recklessness on a grand scale.” [Hansard, 8 February 2010] I totally agree. And it’s time Malcolm Turnbull, Joe Hockey and the other climate change believers in the Coalition stood up to be counted. Or are the Liberals not only no longer the party of the free market. But no longer a broad church party where MPs are free to express their convictions as well? Friends, none of this means we have to lead the world, and we have not. At the same time, we cannot afford to be left behind, yet we are. While Australia delays, our peers and competitors are on the move. Thirty-two countries and 10 US states already have emissions trading schemes. Other economies, including China, Taiwan, Chile and South Korea, and a number of Canadian provinces, are either considering developing their own ETS or already have trial schemes in place. Carbon taxes are in place in Britain, Denmark, Finland, Norway, Sweden, the Netherlands and Canada and are under discussion elsewhere, including Japan and South Africa. China is closing environmentally-damaging, unsafe and economically inefficient small coal-fired generators at the rate of one every one or two weeks and replacing them with larger plants that are economically and environmentally much more efficient. They are putting up wind turbines at the rate of one every hour. China has also set its own ambitious target of reducing carbon pollution by 40 to 45 per cent per unit of GDP by 2020. India is taxing coal to create a revenue stream for clean energy, and from April this year they will have an energy efficiency trading scheme.
In the race to build a clean energy economy, we have given the rest of the world a head start. We’re going to have to work hard if we don’t want to be left behind. Friends, as we make that transition to a low carbon future, we won’t leave business and workers and unions to manage on their own. That is not the Labor way. In the coming months, you’ll hear a lot about the impact a carbon price will have on employment. Let me say this very clearly: We will protect Australian jobs at the same time as we create new ones. The Government understands that some Australian firms compete with overseas industries that won’t necessarily incur the same carbon costs as they would here. I don’t want jobs in those industries to go overseas. And I don’t want the emissions that come with those jobs to go overseas either because that would only compound the world’s carbon problems. That’s why the Government has committed to helping Australia’s trade-exposed emissions-intensive industries as the world transitions to a lower carbon future. Some people argue that providing assistance removes the incentive for business to reduce their pollution. I reject that assertion and I reject the lack of importance that this sentiment gives to the importance of protecting Australian jobs. To take just one example of the way this assistance could work. If the Government chose to provide that assistance in the form of free permits as some have suggested though this decision has yet to be made, these businesses would then have an opportunity to reduce their carbon emissions, sell their surplus permits, and actually make money. Friends, just as we assist industry, so too will we assist households. There is no cost-free way of reducing carbon pollution and I don’t resile from that fact. Even Mr Abbott accepts there will be a pricing impact:
“I’m not saying there’s cost-free ways to reduce emissions.” [MTR, 1 March 2011] Amid all the misrepresentations, that is a precious grain of truth. But there is another more important truth to accompany it: under Labor’s equitable approach, price rises will be met by fair and generous assistance. We are still yet to decide on assistance measures, so Mr Abbott’s talk of excessive cost impacts is simply absurd. What is certain is that all funds raised by a carbon price will go to assisting households, helping business transition and programs to tackle climate change. Not a cent will go to Treasury. And the biggest share will go to households We will not allow low and middle income Australia to lose out. This is how Labor does economic reform. Make the big decisions. But carry the nation’s families and households with us along the way. Friends, three weeks ago, I began a process that will equip our nation with a clean energy economy for the future: a price on carbon. It is a big call. One of the biggest in the modern era. A call that will shape the destiny of our nation as greatly as floating the dollar, cutting tariffs or introducing the GST. This nation-changing reform has been met with a campaign of fear just as Dunstan’s groundbreaking reforms were met with fear and misunderstanding, reforms now taken for granted as part of everyday life. Like those purveyors of fear in the 60s and 70s, Australians of the future will look back on Mr Abbott’s campaign with pity and shame. The pity and shame posterity reserves for leaders who miss the wave of history and misjudge the big calls. The leaders who create fear and try to stop a confident nation dealing with the challenges of the future.
I will never be such a leader. Faced with hurdles, I will always find a way through. Faced with choosing between taking a few knocks or doing what’s best for the nation, I will put our nation first every time, no matter what the personal price. I will always ensure that this nation seizes the opportunities of the future and does not cower in fear. A low-pollution, clean-energy economy is one of those opportunities. Lord Stern calls it “the most dynamic and creative energy and industrial revolution in our economic history.” Mr Abbott wants us to believe that Australians are incapable of such change. I don’t share his basic lack of faith in the Australian people. Growing up here in Adelaide, I learnt something better than that. I learnt to have faith in the creative and optimistic spirit of this nation and its people. To believe that we are a smart, competent, resilient nation. A nation that has done great things in the past, and which can do even greater things in the future. A nation that understands when the soft options are gone, only hard choices remain. That is why we choose action over inaction. We will cut carbon pollution. We will not leave our nation stranded by history. We will not live at the expense of future generations. We will get this call right and get this job done: For our nation. For our people. For our future.
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