UHLMANN: Prime Minister good morning.
PM: Good morning Chris.
UHLMANN: Now you have dubbed this the Carbon Pollution Reduction System so by 2015 will it have delivered a cut in greenhouse gas emissions?
PM: We will know the precise impact over time once we set the mid term targets, once we set what is called within this debate, the trajectory. That is, the stages to be reached over time. And that in turn will obviously inform us and the country as to what reduction will occur at particular year points.
And we will know that therefore once we produce those mid terms targets in the white paper at the end of the year.
UHLMANN: So is it possible that green house gas emissions could rise between 2010 and 2015?
PM: Well we will know once we set those mid term targets and as I said they are part of the white paper process. That will occur, we aim for, the end of this year, early next year. And that is the logical way to proceed.
Step by step. The purpose of the green paper as you know Chris, was to outline the design features of a Carbon Pollution Reduction Scheme, how it would work. The actual speed at which it operates is phase two and that is what we will do once we have got the Treasury modelling and once we have produced our mid term targets.
UHLMANN: I understand that Prime Minister but I am not asking for specific figures, I am just wondering whether or not emissions will fall between 2010 and 2015. It is called the Carbon Pollution Reduction System so will it live up to the title on the box?
PM: Once you see the mid term targets Chris, it will certainly have that impact over time but I am not going to stand here and pull a number out of space and say it is going to be at that level at this time.
The key thing, and we have done this in a matter of six or seven months of being in Government is achieve the outline of such a scheme. Our predecessors, and I heard one of them on the radio just before, had 12 years to act on this and failed to do so, even though they were provided with a submission to cabinet on this five years ago and didn't have the political courage to act.
In six months we tried to turn this around. Here is the outline of how our scheme would work. The speed at which it operates, we will settle once the Treasury modelling is done.
UHLMANN: If it doesn't cut emissions will it be a failure?
PM: Well the whole point of this system is to reduce emissions. Remember if you step back from this all, what is, what are the three pillars of this Government's approach to global warming and climate change?
Firstly to bring about reductions in global greenhouse emissions. Secondly to ensure that we have got appropriate adaptation strategies for our most exposed industries already and I think particularly of our farmers and agriculture at this point.
And thirdly, to participate fully through our ratification of Kyoto, in negotiating a global arrangement on climate change so that we can do something effectively for this country for the medium to long term.
That is the strategy. That's what we've embarked upon. Nothing is going to be perfect but it certainly beats sticking your head in the sand, which is what the Liberal Party have been doing for 12 years.
UHLMANN: Now you have talked a lot about compensation but this system doesn't inflict some pain, then it wont change behaviour will it?
PM: Well, what we have looked at here through this scheme is to make sure that first of all it has wide coverage. It covers 75 per cent of emissions in the Australian economy. Secondly therefore, when you are talking about a scheme which covers effectively that spread of the economy, we are looking at a very extensive scheme in terms of it's overall impact.
Secondly on the adjustment mechanisms for households and for businesses, what we are concerned about it to ensure that we enable those least able to cope with any adjustment costs, pensioners, carers, low income earners to be helped on the way through.
That is why we have said we would meet any additional cost flowing from the scheme. And secondly for businesses, to provide them with adaptation and transition arrangements as well. All necessary to move Australia gradually over time to a lower carbon economy,
UHLMANN: Where is the incentive to change if you provide too much compensation?
PM: Well that will, that incentive will of course be struck once the carbon reduction, Carbon Pollution Reduction Scheme begins operating and you then have a carbon price which is set.
Then what happens is that it becomes much more cost effective for businesses and, over time, households to move to more carbon efficient ways of going about their daily work, their daily life. Or in the case of businesses, how they operate.
For example, over time, we would probably point in the direction of motorists deciding that the best thing to do is to move to more fuel efficient vehicles. I would have thought for the country overall, that's important, coming off the back of the overall resolve to move to a lower carbon economy.
UHLMANN: Easy for the rich to move to more fuel efficient vehicles than the poor though isn't it?
PM: Well that's why the adjustment system that we outline in the Green Paper starts from the first and fundamental principle that those will least financial flexibility, pensioners, carers, those on income support payments, that we would meet adjustment costs for them. Similarly for low income earners.
We would also provide assistance to other households to assist with the investment in energy efficiency technologies and systems and appliances for their homes.
This is a long term gradual change but with one end point in mind and that is to bring down our overall carbon emissions and with that work with the rest of the world in negotiating an effective carbon reduction scheme globally.
UHLMANN: And when you speak of working with the rest of the world the one thing that is clear in all this, isn't it, that if there is no movement by the rest of the world then this system wont make any difference at all to global warming.
PM: Well for Australia, we are already the hottest and driest continent on earth. Therefore, this continent, is likely to be the hardest and earliest hit by climate change.
One simple fact is that the CSIRO and the bureau of meteorology talk about what is going to happen with the future of temperature increases in Australia. The impact also which flows to drought, 20 per cent more droughted areas by 2030.
If there is no change, a 63 per cent reduction in agricultural exports. All that means, loss to the economy, loss to jobs. Therefore we have got to act. But I also know, having just been to the G8 meeting in Hokkaido in Japan, is that in order to have any hope of delivering a decent global outcome that countries like ourselves have to be at the negotiating table and acting.
If you are engaged in this sort of game of, you know, waiting for someone else to always move first, always move first, then guess what, every country adopts that strategy, every country adopts that strategy then actually no progress is made whatsoever.
UHLMANN: Well you are going to move Prime Minister and you have just been to the G8 and you have spoken to some of these leaders. How optimistic are you that there will be an international system that will have meaningful change?
PM: I think it is to be blunt Chris, I think it is just too early to tell. What I do know is this, when I hear people like the Liberal party here talking about the future of climate change and as if we are acting solely ourselves. We already have 27 states in the European Union who have one form of emissions trading or another.
We have a large number of states and provinces in the United States and Canada doing the same. The Japanese are debating the introduction of a scheme themselves. Both Republican and Democrat candidates for the Presidency in the United States have committed to carbon reduction targets either the same as or more ambitious than we have for Australia.
The world is starting to move on this, and the reason is everyone is starting to calculate the economic cost of not moving. And that means standard of living and jobs and it is a difficult challenge for us, but I am not about to bury my head in the sane and just hope it goes away. We will embark upon this course of action.
UHLMANN: Yeah but just briefly on this point Prime Minister, in a world where we cant be sure whether the leaders are murdering their people or building nuclear weapons, how can you have a system where you verify the emissions of millions of companies.
PM: Well it is going to be tough but the alternative Chris is to do nothing.
Remember what we committed to through the Bali road map only six months ago on the part of developing economies was for measurable and verifiable commitments to action by developing countries. That has to be now translated into reality.
But you can either be at the margins of this and say, ‘well it's all to hard, I am just going to go away', or you can pitch in and try and come up with a solution.
If we fail, the economic consequences for this country, Australia, are massive. We will have a real impact on our standard of living, a real impact on jobs, a real impact on how we live our daily lives. I am not prepared to stand by and allow that to happen. We will come up, as we have done with this Green Paper, with a responsible balanced course of action.
UHLMANN: Finally, are you expecting support for this in the Senate from the Liberal Party?
PM: Well the Liberal Party as you know, have changed their position now three times. This time last year, the first half of last year they opposed emissions trading. By the time it got to the election they said they were going to have it.
You had Malcolm Turnbull on air just before, who in July last year said that they would have the most ambitious, well the Liberal Party said, they would have the most ambitious emissions trading scheme in the world and it would include transport fuel.
Now that we have got the election out of the way they are back to their position of the first part of last year, which is they oppose it, it seems.
Who knows what their position is. But I would appeal to the Liberals to either adopt a responsible course of action for the Australian economy and be partners in getting this right for the long term future as opposed to just playing short term irresponsible politics, because frankly, it is not going to get us anywhere.
UHLMANN: Prime Minister thank you.
PM: Thanks very much.