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Press conference: carbon floor price

Media Release
Christine Milne 28 Aug 2012

Leader of the Australian Greens, Senator Christine Milne, addressed the press on the announcement on the carbon floor price.

 

Transcript

 

Subjects: carbon floor price, EU emissions trading scheme, Tony Abbott

CHRISTINE MILNE: Today is an exciting day in terms of addressing climate change in Australia. As part of the agreement when Prime Minister Gillard came to office for this period, we signed an agreement to deliver carbon pricing in Australia in this term of government. Today's announcement that we will be linking the scheme that we've developed and legislated with the European Union is good news indeed. That means that the Australian scheme will be linked with 500 million people in the EU, it advances the cause of global emissions trading which is ultimately what we have all been hoping for and what we're doing is actually improving the scheme that we legislated and it will give long-term idea to business, some certainty, some stability, because they will be looking at the European price, they will be getting the long-term pricing trajectory and everybody will be working from that same pricing trajectory so it's good news in that sense. When the Greens negotiated the floor price it was in the context of companies being able to buy a lot of CERs and we were very concerned at the time that when we went from the fixed price to flexible pricing that the price would drop to the CER price. Now effectively we are exchanging a short-term floor price for a long-term trajectory, for stability, and I'm really excited about that, it means that the European price will bind with the 12.5 per cent CER limit and so companies from today will know that they are going to be dealing with the European price. And that has to be good news. It means that all the talk that has gone on in Australia about Australia going it alone, Australia going before the rest of the world, Australia taking action more than anyone else, people can clearly see that is nonsense. From today companies will be able to buy into the European market and there will be this discussion from now on about getting a treaty by 2018 to have two way trading, by which time hopefully other markets will come on board.

This is good news for long-term investment in renewable energy and energy efficiency and it certainly gives business in Australia the sense that this is here to stay, that we're globally linked and it is a real on the table achievement of the Greens and the Government working together to improve the scheme that we have legislated.

JOURNALIST: The European economy shows no signs of recovering from the Global Financial Crisis, how can you realistically expect the European price to be anywhere near the level you need to drive the sorts of change you want to drive for the Australian economy?

CHRISTINE MILNE: I'm confident the Europeans are going to take quite a lot of action to restore their price as it currently is, it's just below $10 and our floor price was going to be $15 in 2015. I'm confident that the European Union has so much investment in the pipeline in renewable energy, energy efficiency, in trying to maintain a competitive edge in the low carbon economy that they are going to take action. They've been talking for some time about setting aside a large number of permits in their auction process in order to drive up the price, there are a number of directives under discussion in the European Union. The Government's had discussions with the European Union and so have I, and I am confident that in the next couple of years you're going to see the European price recover because all those economies are seeing their future in terms of economic growth associated with a low carbon economy and that transformation and decoupling economic growth from resource depletion and pollution.

JOURNALIST: Is it the Greens that asked for a limitation on the CER price in return for dropping the price floor?

CHRISTINE MILNE: The European Union made it very clear that the limit on CERs was essential and of course that is something that the Greens argued throughout our negotiation with the Government previously and had been unable to persuade the Government to put such a limit on CERs. The great thing about limiting the units from the clean development mechanism and so on means that you are going to have the European price bind and that was a really critical component for the Greens. It means that there is real credibility in the scheme and essentially it is saying this is where the price is going to be in the future. From now on Australian businesses, look at the trajectory in Europe, that's where the price is going to be.

JOURNALIST: The Government is talking down any potential budgetary implications of the decision to scrap the floor price. Do you think that's a bit naive given as you say the EU floor price at the moment is under $10?

CHRISTINE MILNE: No don't think there will be either adverse budgetary implications. It's clear when you talk to analysts about where the European price is going to be by 2015. They are all saying that in fact it could be well ahead of where the  Australian Treasury modelling is in terms of a higher price. There are some saying that you could have a European price as high as $50 for example. So let's see where the European price is going to be, but I am confident that they will take measures to drive up the price in Europe in order to secure their investment pipeline. Huge amounts going on in Germany for example to make a big shift to renewables, there's a lot of offshore wind sitting waiting in the UK, so all over the place in Europe people need a higher price and they are going to work towards it.

JOURNALIST: Would you agree that Australian businesses don't share your confidence though and that's why they wanted this floor price scrapped, they think it will plummet?

CHRISTINE MILNE: I think a lot of Australian businesses who wanted to get rid of the floor price were hoping that the binding price would be the CER price and they were hoping they were going to get away with bargain basement prices in the scheme so I think what we're now going to see is a bit of a mixed reaction, they wanted the floor price done away with but I don't know that they wanted the European price to be the floor price.

JOURNALIST: Isn't the effects of what's been done is that the emissions reductions in Australia is effectively linked to what Poland wants to do in relation to EU linked to this.

CHRISTINE MILNE:  Well certainly we are linking our future in terms of emissions trading to the European Union and the European Union is going to have to work out its internal politics with Poland and other Eastern European, formerly Eastern European, countries so certainly this is about working out what is the best thing to do to give Australians a clear view of the future and by making some decisions about certainty and the certainty is from now on the price from 2015 will be the Europe price, so make your investment decisions in Australia in relation to the European price, and overwhelmingly the majority of economies in Europe need that price to improve and get much higher. How the Europeans manage some of the countries within the European Union is going to be their business, but that is essentially the trade-off. The Greens have worked really hard here to get a better outcome, we have worked with the Government and for all those people who think that the Greens don't negotiate in balance of power scenarios, let me assure you this has been a long negotiation with the Government, with the European Union, and I am persuaded that this negotiation is for the better. We are going to get a really good outcome here and that demonstrates where we come from in these negotiations is to get a better outcome, to actually link this for the longer term and to really embed emissions trading in Australia

JOURNALIST: You were quite strong when Rob Oakeshott first suggested that the floor price be scrapped saying that it would undermine climate action and business certainty and provide no benefits to the community. Is it simply that linking with the EU scheme that resolves all of those concerns that you expressed back in May?

CHISTINE MILNE: That's right. So the key component here is linking with the European Union. The main issue for having a floor price before was that in 2015 the price would have dropped to be the CDM price had we not had a floor price.

JOURNALIST: It does the things you wanted for business certainty, for action on climate change and it will provide benefits to the community?

CHRISTINE MILNE: I think it's a great thing for Australia to be linked into the European Union scheme. I think it's going to have tremendous outcomes for, particularly renewable energy, energy efficiency, everyone's now going to look to the future and see that European price, so it's going to have good outcomes for business, it's going to have good outcomes for the community, and good outcomes in terms of the climate. After all we've just had the latest science telling us that the Arctic ice melt this year is at extreme levels, we've also got the latest science in from the Antarctic, where drilling is showing again advancing climate change and you're seeing it also with ocean surface temperatures up by one degree and consequent problems in the marine environment, so we've got to get on with this' quickly.

In the absence of momentum at the global level around the UNFCCC talks this is one of the best ways of showing that the Europeans and the Australians, two regions around the world are getting together to drive global emissions trading with the intent of transformation in economies. What better news could there be for the climate than that

JOURNALIST: When you said that certainty, wouldn't it have been better  to have held off for, say, two years to see if the European scheme recovers before making this commitment?

CHRISTINE MILNE: No, I think it's a really good idea because we had to work out when we went to flexible pricing in 2015 how we could guarantee to business a long-term trajectory, how we could make sure that we would have an increase in price trajectory over time and not just fall back on the CDM. And this is really the best way of doing that.

JOURNALIST: You've locked out, or you've organised here to lock out most of the cheap and perhaps environmentally suspect UN credits, Kyoto credits, but at the same time you're arguing that, and conservation groups are arguing that Australia should sign up to the Kyoto Protocol II which is the system to create those credits. So can you just explain, there's a contradiction it seems

CHRISTINE MILNE:  We want to see the world sign up to a second commitment period of the Kyoto Protocol. And the reason for that is so that we can work towards a treaty with globally binding targets that are consistent with the science and you need to have a Kyoto Protocol mark two to get those binding targets, and that is why we argued for that.  However in the meantime we want to make sure that any tradeable unit actually has real benefits for the climate, and that you have additionality, that they are genuine abatement, and that's where I think you've got to make sure that we go with those genuine opportunities and a lot of what has gone on in the market up until now has not got the certification that would give me the confidence that you would be actually reducing emissions, notwithstanding the importance of the CDM for developing economies.

JOURNALIST:  So this agreement in a way sends that signal do you think to the UNFCCC talks?

CHRISTINE MILNE: I think it's going to be really welcomed in the UNFCCC, I'm sure Connie Hedegaard is terribly disappointed with the outcome in Copenhagen,  she's now been working as part of the European Commission to try and advance action on climate change, and I think the European Commission are just as excited as we are about the fact that Australian and the EU are linking, because what this really shows to the US in particular, it's isolated over there, and what this shows is that Australia and the EU are moving together in our region. We've got China to working towards emissions trading and piloting those regional schemes, how exciting is that. And how much more pressure is now going to come on to some of those other more sceptical nations if you like, to get on-board. The world is shifting. We are going to address climate change. This is the most effective mechanism to do it and the EU and Australia are, if you like, in quality control here.

JOURNALIST: Does this make it now impossible for Tony Abbott if he were to gain power, to rescind the carbon price?

CHRISTINE MILNE: Certainly from today Australian businesses can start purchasing some of their liabilities in terms of the European scheme and Tony Abbott will need to answer the question as to how he can possibly try and pull this apart and whether he would compensate people who, going into banking now on the current European units. So yes, what this is doing is saying Australia has made the shift, we're in the transformation to the low carbon, zero carbon economy, we are linking with the rest of the world, and Tony Abbott's Direct Action scheme is looking more and more pathetic by the day, it also absolutely shows the lie that Tony Abbott has been telling that Australia's going it alone, that Australia's doing something different, we are not, we are linking with the European Union, we are looking ahead and we are giving the biggest boost, the biggest long-term boost to renewables and energy efficiency, all those industries are now going to be thinking to themselves trajectories for the European price are going up, therefore we have to do everything in our power in Australia to reduce our levels of carbon pollution, that means investment in efficiency, renewables, so it's good news all round.

 

 

 

 

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