PRIME MINISTER:
Thanks, everyone, for being here.
As you know, the focus of this Government is always on growth and jobs, jobs and growth – that's been our focus all along and I'm very pleased that, over the period since the election, our economy has created more than 330,000 jobs which means that we are on track to achieve our targets of a million jobs within five years and two million jobs within a decade.
Also I'm delighted that, thanks to our Government’s plan, our economy is growing at amongst the fastest rates in the developed world. Obviously, it is very important that everything we do is done with this in mind: how do we promote jobs and growth, how do we promote growth and jobs, and climate change policy is no different. We have got to be environmentally responsible but we have got to be economically responsible too.
We have got to reduce our emissions, but we have got to reduce our emissions in ways which are consistent with continued strong growth, particularly with continued strong jobs growth. The last thing we want to do is strengthen the environment and at the same time damage our economy – that is the Labor way, to put the environment ahead of the economy. What we want to do is to protect and promote both and that is exactly what today’s decision is all about.
We have come to the position as a Government that our 2030 emissions reduction target will be in the range of 26 to 28 per cent. There is a definite commitment to 26 per cent but we believe under the policies that we have got, with the circumstances that we think will apply, that we can go to 28 per cent. This is fairly and squarely in the middle of comparable economies. It is not quite as high as the Europeans at 34 per cent on 2005. It is better than the Japanese at 25 per cent. It is vastly better than the Koreans at 4 per cent. It's immeasurably better than the Chinese who will actually increase their emissions by 150 per cent between now and 2030. So, this is a good, solid result. It's a good, solid, economically responsible, environmentally responsible target.
I should – before I throw to Julie and to Greg – just point out that, when it comes to emissions per capita, our reduction of at least 50 per cent will be the highest in the developed world of the countries that have already declared themselves. So, this is a very, very solid result and it is a result that we are very, very confident can be achieved using the kinds of policies that are already in place and which we believe are already working well.
Finally, let me thank Julie, the Deputy Leader and Foreign Minister, Greg, the Minister for the Environment, for the tremendous work that they have done. Julie has done great work with the overseas negotiations. Greg, here at home, has done really outstanding work on policy and has been an extraordinarily effective advocate of responsible environmentalism, and after Julie has spoken, Greg will have a brief slide slow to give you.
FOREIGN MINISTER:
Thank you, Prime Minister.
Climate change is a global challenge so to tackle it effectively and reduce emissions you need a global agreement and all countries working together. I have been spending time with counterpart Environment and Foreign Ministers over many months and have been discussing what other countries, comparable economies, our competitor trading partners and major developed countries as well as developing countries are doing in this space. As recently as last week, I had very detailed discussions with the Chinese Foreign Minister Wang Yi and Secretary of State John Kerry on a global agreement and the possibility of achieving global agreement in the lead-up to the climate change meeting in Paris in December. Our target range of 26 to 28 per cent with 2005 as a base by 2030, means that we will take to Paris a strong and credible environmentally and economically responsible position.
It means that Australia, responsible for 1.3 per cent of the world's emissions, as the 13th largest emitter, in absolute terms, is doing our bit and that's what matters. Like our 2020 target, our 2030 target range of 26 to 28 per cent is ambitious. It's comparable with other countries when you compare like with like. For example, the European Union have announced a 40 per cent reduction but below 1990 levels. If you translate that into 2005, it is a much more modest reduction.
We have taken into account our economic growth, our population growth. It is higher than most OECD countries. As a result, as the Prime Minister said, our per capita emissions will reduce more sharply. Indeed, we will halve emissions per person in Australia over the next 15 years and that is more than any other major economy or any other comparable nation.
We are a country that sets credible, achievable targets and we meet them. We exceeded our first Kyoto target when many didn't meet theirs. We are on track to meet our 2020 target. We have put forward a target for 2030 that is credible and achievable. Fifty countries have announced targets in advance of Paris, and so it is appropriate that now that we have Party Room backing that we should announce our target now and I will be submitting this to the United Nations shortly.
In Paris in December, the aim is to produce a global agreement that delivers effective and fair and economically responsible climate action by all countries. It will also establish a framework for further action to address the below 2 degree goal. Why do we need a new framework global agreement? Well, if you look at Kyoto in 1992, at that time, three of the top 12 emitters were non-industrial or developing countries. Today, seven of the top 12 emitters are the non-industrial developing countries making up about two-thirds of global emissions coming from the developing world.
So, things have changed. It's time for a new agreement, a global agreement, where all countries take action. Australia is playing a very positive role in the lead-up to Paris and we believe that a strong agreement that includes all countries is achievable and it is most certainly in Australia's national interest.
PRIME MINISTER:
Thanks, Julie. Greg?
ENVIRONMENT MINISTER:
Thanks, Prime Minister, and Julie. Climate change is real and important and significant. Cost of living and the cost of electricity are real and important and significant for families, most especially low-income families. So, there is a right way and a wrong way to address climate change.
The right way is through incentives which improve our ability as a country to perform both economically and to take care of those who are most socially in need. The wrong way is a massive electricity tax – a tax which is about driving up the cost of living. So, what we have done is crafted a position for Australia which shows that we share our fair share, we do the right thing by the planet, we also do the right thing by families. To that extent, I want to briefly set out why we have done what we have done, how we will get there, and what we are doing as a nation. It is a story about which Australia should be proud.
What this shows is Australia's share of global emissions. China and the United States clearly have the vast bulk of emissions. Australia is here, as Julie said, at 1.3 per cent. This is a very interesting proposition, the idea that Australia has grown since 1990 through to now, our real GDP has almost doubled or has doubled. Our emissions per person are well down and our emissions per unit of GDP have halved. That story is often not understood, that Australia has made massive strides. Then this is interesting, this is how we have closed the gap on our 2020 target.
In 2008, when the justification for the carbon tax was put in place, it was 1.3 billion tonnes which Labor said we needed to find for the period between 2012 and 2020. Then before the election, in a figure we said was inflated, 755 million tonnes, then 421 million tonnes. Now, the official figures are 236 million tonnes, but these figures are declining and we are on track to be in a position by Paris to show that we will meet and beat – meet and beat – our 2020 targets.
That, then, brings us to the post-2020. What we see here is the comparable countries of Japan at -25 per cent. We have the United States -26 to -28 per cent on 2025. New Zealand which was -25 for 2025 then becomes 30, as is Canada for 2030. The EU when you do like with like, 34 per cent. As the Prime Minister said, Korea, a competitor and comparable nation in many ways, -4 per cent and the growth in China will be about plus-150 per cent. That then led us to our goal here of putting us fairly amongst comparable nations of -26 per cent and up to -28 per cent. So, a range, as with the United States, of -26 to -28 per cent.
You can see here that this is Australia – right in the middle – doing not just our fair share but doing a lot of heavy lifting for the world and I say that because – we will provide all of these materials – on a per capita basis, when you look at the same time frame, Australia is seeing a 50 per cent reduction. That is the highest of any comparable country.
Australia's per capita reductions and we do start from a higher place – as we go forward to 2030 are the highest of any comparable country, as is the reduction in our emissions intensity per unit of GDP. That then, I think, is important to understand when you look at this in a visual way, there is Australia on a per capita basis doing more than any other comparable country and, on an intensity basis, only matched by China in terms of our emissions reduction.
So, when people say that it is critical for Australia to play its part in per capita – we are.
In terms of intensity – we are.
Then the last question is: how do we actually get there? When you look at this, you see these are the reductions through the work of the whole-of-government analysis which we have identified. First, this will be emissions that we are buying now – emissions reductions from the Emissions Reduction Fund before 2020. This is what the Emissions Reduction Fund and the safeguards mechanism will produce over the course of the decade from 2020 to 2030. It is our enduring and fundamental policy, unlike the Labor Party which changes its policy literally every year. It's been our policy since 2010 and I fully intend and we fully intend it will be our policy to 2030 and beyond.
There is also, as outlined in white paper, the National Energy Productivity Plan, the vehicle efficiencies measures which will be developed, the ozone and fluoro carbon measures – those measures are coming as part of the next round of the Montreal Protocol and have the support of the refrigerants industry but we are doing this without increasing the price of the refrigerants. The Labor Party, in many cases, doubled and quadrupled the price of refrigerants and therefore had a huge impact on farmers, on dairies and on small supermarkets with their carbon tax. Here we have the other measures, technology change, modelled on a very conservative basis carry-over because there is a very real chance Australia will have a significant carry-over and then other items which we’ll develop.
We modelled to 26 and then we realised there was sufficient surplus that we could go to 28. So, like the United States, we will have a -26 to -28 per cent target. Theirs is 2025. Ours is 2030. So, what we have shown here is we can do this and we do this without a carbon tax. The Labor Party has one big thing here: they have a stack of carbon tax, they have an electricity price.
So, the next election will be about a choice – reducing emissions in a way which can help Australia be part of the world task but without a tax on families or a tax on families, a tax on businesses, a tax on electricity – the choice is clear.
We are doing the right thing by Australia. We are doing the right thing by the world. But we are doing it in a way which is responsible.
PRIME MINISTER:
Okay, Phil?
QUESTION:
Do you have an estimate of how much it will cost the Budget to keep using the Emissions Reduction Fund post ‘30 and will that jeopardise your plan to get the Budget back into strong surplus within a decade?
PRIME MINISTER:
We are estimating that the ongoing costs of the Emissions Reduction Fund will be in the order of $200 million a year. We have done some modelling which will be released shortly and the modelling shows that what we have in mind is not cost-free to the economy. There is no cost-free way of substantially reducing emissions but the modelling suggests that the cost to our economy of a 26 per cent reduction in emissions is between 0.2 and 0.3 per cent of GDP in the year of 2030. That's between $3 billion and $4 billion in current terms. The modelling that we have done suggests that achieving a 40 per cent reduction by then will be much more expensive. It will be over 2 per cent of GDP, so that's in the order of $40 billion.
So, this is certainly not without costs but the costs are manageable. It's the Labor Party which is proposing to hit our economy with massive and unmanageable costs, massive increases in power prices, massive increase in the hit on families' cost of living.
Lenore?
QUESTION:
I understand that 0.2 to 0.3 per cent of GDP cost is based on the idea that you would allow the purchase of international permits and that without it, the cost would be maybe twice as much to the economy if you don't allow international permits to be bought, so will you? I also was told that the difference between a 26 per cent target and a 30-35 per cent target wasn't that great. Is that true? And if so why would you choose the lower number?
PRIME MINISTER:
I will ask both Julie and Greg to respond but the short answer is that there is a higher cost, the higher the emissions reduction target – as you'd expect. So, the higher the target, the higher the cost, but this particular target, we believe, has a manageable cost based on our experience over the last few years.
Julie and Greg?
FOREIGN MINISTER:
We believe that we can meet this target without access to international units. Business is keen for us to leave international units on the table and we will do that but we believe we can achieve this without needing to access international units. Other countries will be factoring in international units in their targets. We can look at this again in 2017, 2018, or beyond, but we believe we can achieve this without access to the international units and we have assured business that we will leave that option on the table.
PRIME MINISTER:
Greg?
ENVIRONMENT MINISTER:
The first thing here is what we have done is exactly as Julie has said: done our analysis based on the suite of policies that are on the board so we are continuing on our existing suite of policies. It is important to remember this – that the entire carbon tax experiment produced roughly a quarter of the emissions that were gained through the first abatement or Emissions Reduction Fund auction. That came in at well over $1,000 per tonne of abatement, whereas we produced the emissions reduction at $13.95. So, we have a mechanism which produces reductions at a fraction of the cost of the carbon tax.
QUESTION:
If using international permits would halve the economic cost, why not allow them?
ENVIRONMENT MINISTER:
We have, as Julie Bishop has said, reserved that position. We have left it on the table and this process will go forward over many years. We're able to achieve these reductions as they stand without doing that. We have left that as an element to be determined at a future time.
PRIME MINISTER:
Could I just add something, Lenore? I mean, it seems to me that if Australia is going to do its duty by the international community and, indeed, in the task of emissions reduction, these should be domestic reductions in emissions rather than instantly rushing off to try to get them from other countries.
Paul?
QUESTION:
Prime Minister or Minister Hunt, when will we see the safeguard mechanism and how critical is it to achieving the target? Will it include, for example, high fines for big emitters?
ENVIRONMENT MINISTER:
The safeguard mechanism is something that is the next phase. So today was the target and it has been – I've got to say – one of the best processes I have been involved with in my time in Parliament. I am deeply thankful to the Prime Minister and to Julie for the way in which they have helped drive and lead it. In terms of the safeguards, that's due to be tabled before the Parliament by 1 October and we are budgeting zero revenue. So we are not looking for any money from any companies. Our position has been the same since 2010. Our policy has been the same and when our policy was put to the test in the first Emissions Reduction Fund auction, it didn't just succeed, it beat expectations by a factor of 10.
QUESTION:
Prime Minister, is this your final offer for Paris? And secondly, the technology improvements and other sources of abatement, does that leave room, potentially, for a higher Renewable Energy Target if that's deemed feasible?
PRIME MINISTER:
It doesn’t depend upon a higher Renewable Energy Target. It assumes the target that is now in place, which is effectively a 23 per cent target. What we believe is achievable is responsible and it’s certainly environmentally credible given what other countries have put forward. We are not leading, but we are certainly not lagging, and that's what we always said we would achieve. Where we are leading, of course, is in emissions reduction per person – a 50 per cent-plus emissions reduction per person which is the best in the developed world.
So, look, this is our target and we think this is a highly responsible international target. It's environmentally responsible because it's more than comparable with what other countries are doing and it's economically responsible because it doesn't depend upon a great big new tax on everything or a massive overbuild of renewable capacity in the next few years.
FOREIGN MINISTER:
May I just add, the Paris meeting is not about negotiating targets. In advance of the meeting, countries are expected to put forward their target, hopefully before UN General Assembly leaders' week. So, Australia has put forward our target, about 52 countries have put forward their target, but the Paris meeting is not about negotiating targets. It's about getting all countries to sign up to a global agreement and then the framework for action for the two degree goal.
QUESTION:
Can I ask about the Paris summit, have you decided not to go and why? And if I could ask the Minister Greg Hunt, that beige block on the bottom of the ladder on the graph…
ENVIRONMENT MINISTER:
Apricot!
FOREIGN MINISTER:
I thought it was more beige!
QUESTION:
…it is the second biggest block there, can you talk to what that actually means, technology improvement and other sources of abatement. What is that? Because that is the second biggest chunk you’re going to achieve in emissions reduction. What is it?
ENVIRONMENT MINISTER:
I’ll let the Prime Minister go first…
PRIME MINISTER:
Look, Julie will be leading our delegation on the assumption that, at this stage, it's a foreign ministers meeting. If, on the other hand, it were to become a leaders' meeting, yes, I'd be there and gladly be there, because as Minister Hunt has said, climate change is important, mankind does make a contribution, and we, here in Australia, should have a strong and effective policy to deal with it and, as today's announcement shows, we do.
ENVIRONMENT MINISTER:
The answer is that this component here involves technology, yes – things such as battery storage improvement, which we think is a very significantly likely development but it also includes the potential for carry-over. We think Australia will have a significant carry-over going into the 2020 period. It also looks at other forms of energy efficiency. We have been very conservative in our assessments of that and the advice we have on our modelling is there is a 30 per cent downside in our cost relative to the 0.2 per cent about which the Prime Minister talks.
QUESTION:
Prime Minister, I understand that the climate sceptics in your Party, as described by one of your members today, have indicated to you in the Party Room meeting that they can live with this. What does that say about it for a start but has this been negotiated with climate sceptics in the Party?
PRIME MINISTER:
No, this has been carefully put together to be environmentally and economically responsible. Our 26 to 28 per cent target, it's better than Japan. It's almost the same as New Zealand. It's a whisker below Canada. It's a little below Europe. It's about the same as the United States. It's vastly better than Korea. And, of course, it is unimaginably better than China. Let's not forget that because we have strong economic growth, because we have strong population growth, what we are proposing in terms of emissions reduction per head is the best result in the developed countries that have so far put forward a target. So, this is a very strong and very environmentally responsible result.
Andrew?
QUESTION:
On the Party Room today, I understand that you told the Party Room that you believed that the Coalition Party Room as a whole should decide whether conservative MPs should get a conscience vote on gay marriage…
PRIME MINISTER:
Now, I'm not going to run away from that question, but let's deal with this issue first.
Catherine?
QUESTION:
Prime Minister, in terms of the coal industry, in your opinion, what impact will these targets have on the coal industry in Australia?
PRIME MINISTER:
We are not assuming a massive close-down of coal. In fact, one of the things that will benefit the world in the years and decades to come is if there is a greater use of Australian coal because high-quality Australian coal, as opposed to low-quality local coal, is going to help other countries to, if not reduce their emissions, certainly reduce their emissions intensity. One of the reasons why China is forecast to substantially reduce its intensity, if not its overall emissions, is because it is forecast to rely increasingly on coal from countries such as Australia rather than low-cost and pretty poor-quality local coal. So, we certainly aren't forecasting the demise of coal. Our policy doesn't depend upon the demise of coal. In fact, the only way to protect the coal industry is to go with the sorts of policies that we have. That's why I think our policies are not only good for the environment but very good for jobs.
QUESTION:
Firstly – are you still committed to keeping temperature rises below two degrees? And secondly, how does this target fit in with that?
FOREIGN MINISTER:
As I've said earlier, the Paris meeting is about getting a global agreement where every country puts forward their targets in advance of the meeting and then there will be a discussion about the framework action that would be required in order to meet the two degree goal. So, that will be a discussion that takes place at Paris when we can assess the contribution of all nations, the likelihood of a global agreement, the commitment to the targets and, in the case of Australia, we can say that we have put forward a target that we believe is achievable and, given our track record, that we have met our first stage Kyoto target exceeded, we are on track to meet the second stage, we have put forward a credible, achievable target, then the meeting can assess the kind of framework that would be required to meet that two degree goal.
QUESTION:
Mr Abbott, you have left the way open to attend the Paris meeting if a number of leaders are there, what is your present understanding about leadership representation and what would be your criterion? Are you talking about the leaders of the major economies or a number of leaders?
PRIME MINISTER:
If there were a substantial number of major economy leaders there, obviously I'd go. I mean, it would be foolish not to go if there was the opportunity to meet on a whole range of subjects with the leaders of other economically significant countries. But, again, if this is likely to be an international meeting of great significance – and I think based on what we have seen in the lead-up to it, it is – I suspect that the French, who are very proud hosts, would want it to be a leaders' meeting, as well as simply a meeting to discuss climate change at foreign minister level.
QUESTION:
Would Julie Bishop you be the only Minister, then?
FOREIGN MINISTER:
Can I just say at this stage the French Foreign Minister Laurent Fabius is leading the French delegation, hence I'm leading the Australian delegation. But during the course of UN General Assembly leaders’ week, I expect the framework or the composition of the Paris meeting will become clear – but at this stage the French delegation is being led by Laurent Fabius.
QUESTION:
Prime Minister, from what you have been saying, can we assume that if there is an international agreement in Paris and if your target fits in with it, Australia would be prepared to sign an international treaty to achieve the goal set in Paris?
PRIME MINISTER:
We don't anticipate that there is going to be some kind of a sanctions mechanism coming out of Paris. We don't anticipate that. But certainly, based on what we have seen so far, these targets of ours are absolutely fair square in the middle of the sorts of commitments that countries are making and that's why I think Australia is going to be a very constructive contributor to the discussions in Paris.
QUESTION:
Is your government committed to keeping climate change temperature rise under the two degrees? So, for instance, you go to Paris, the 26 to 28 per cent doesn't quite make it, will you look at further reductions in order to achieve Australia's share of that burden?
PRIME MINISTER:
Well, I will ask Greg to add to this, but, look, my view is that I will leave the science to the scientists. I will leave the statistics to the statisticians. What I will ensure is that Australia's actions are responsible – environmentally responsible and economically responsible – and if a New Zealand target of 29 per cent or thereabouts, and a Canadian target of the 30 per cent or thereabouts, a Japanese target of 25 per cent and a Korean target of four per cent is responsible, if a US target of 26-28 per cent is responsible, our target at 26-28 percent is eminently responsible also, particularly given that our emissions reduction per person is the highest in the developed world of the countries that have so far given us their targets.
ENVIRONMENT MINISTER:
We are part of exactly that process which is about the world through the Paris process reaching a position where we can hold emissions to such a way as global climate change will be limited to two degrees. That's the Paris process. Paris, as Julie Bishop said, is a process; it is not just a one-off, once and for all meeting. It is setting a first major significant set of commitments and then it will put in place a process and we are committed to being part of that process. We are committed to the outcome of the two degrees. Sometimes, the Labor Party and others will say "It's alright now". But they failed with the carbon tax. They failed in terms of their home insulation programme, their green loans, their cash for clunkers. They made lots of commitments but they never actually delivered on any of them effectively. What we have done is put in place practical domestic actions which have delivered four times the reductions at a fraction of the cost in just our first auction compared with what the ALP said.
QUESTION:
Prime Minister, can you confirm that there is a joint Party Room meeting this afternoon to talk about the way forward on same-sex marriage? And responding to the criticism as well from some within your Party that, including the Nationals would be akin to branch-stacking?
PRIME MINISTER:
Well, look, if there are no more questions on the issue of the day?
QUESTION:
[inaudible] explain why you changed the baseline to 2005? My understanding 26 per cent on a 2000 current baseline would be about 19 per cent, why did you do that? Because the figures look better, or…?
PRIME MINISTER:
Because what we are looking at – the graph that Minister Hunt put up there compares all countries on a like basis, on 2005 figures; 2005 are the figures that are being used by the Canadians and the Americans which I suppose are the economies that are most like ours – significant resource economies as well as advanced economies, but if you look at that like comparison, ours is right bang smack in the middle of the field.
ENVIRONMENT MINISTER:
The last thing here is, of course, there was a certain set of parameters for the Kyoto round of commitments and then the world has essentially moved. United States and Canada, as the Prime Minister says; New Zealand and Japan and so Australia as well, and then the general basis has been running from 2005 to 2030. The EU has a different starting year but the same finish year. The US has the same starting year but a different finishing year but essentially, the vast majority of countries are starting in 2005 and the vast majority are ending in 2030. So, we are literally fitting in with the rest of the world.
PRIME MINISTER:
There’s one up the back there and that's on this issue?
QUESTION:
Minister Hunt, on your apricot section, does that assume any decline in the manufacturing sector [inaudible]?
PRIME MINISTER:
So, what it looks at is, firstly, positive technology change. Secondly, it compares dramatically to what we saw yesterday with the modelling of the ALP, where they were literally trying to put our mining and our manufacturing out of business. What we saw is a dramatic reduction under the ALP's modelling, their modelling from government of their own targets, using their own policies which would have seen essentially aluminium in this country go belly-up. And so what we are looking at here is not forcing any change in those sectors in terms of sending emissions offshore and jobs offshore. We want to keep those jobs onshore and we will let the modelling present the individual sector analyses in coming days.
QUESTION:
On gay marriage – why do you want a joint party decision? And Foreign Minister, do you agree with having it done in the Joint Party Room?
PRIME MINISTER:
If I could start, it was raised this morning, as I think you know, in the Liberal Party Room. There was a very brief discussion in the Liberal Party Room – brief and spirited, if I may say so. I then reviewed at the end of the very crowded Party Room that we had today – because obviously we had quite a lengthy discussion of this, as you'd expect given the importance of this issue for our economic and environmental future – I reviewed my pre-election statements and what I said pre-election was that, if this matter, if this matter, same-sex marriage, were to come up in the next Parliament, it will be dealt with by the Coalition Party Room in the usual way.
Now, given that the Coalition Party Room didn't have time this morning to deal with it, given that the people who did briefly touch on this matter in the Party Room today were very much of the mind that it should be dealt with as swiftly as possible, I’ve decided that the Coalition Party Room will effectively reconvene at 3:15 this afternoon, specifically to discuss this subject. So, apart from other parliamentary business, people will be able to focus entirely on the issue of same-sex marriage when the Party Room resumes this afternoon.
FOREIGN MINISTER:
If I can just answer quickly, it was my understanding – indeed my recollection – that the Prime Minister committed to this being a Coalition discussion.
QUESTION:
Are you looking for an outcome today, Prime Minister?
PRIME MINISTER:
Look, I think all of us want a way forward here. Whether the way forward is to maintain the existing position or whether the way forward is to deal with it in some other way will be a matter for the Party Room. Obviously, I have a position on this. I've long had a position on this, and my position hasn't changed, so, let's see what the Party Room comes up with later today.
Thanks so much – we have Question Time to prepare for.
[ends]