darinsullivan.blogspot.com: Jobs and clean energy, not a tax slug

A number of times in each federal Parliament, the elected representatives of the people face important tests of their values, ideas and policy credentials. This week will see one of these tests when the House of Representatives votes on the Gillard Government’s clean energy future legislation.

See how happy we'll all be when there's a wind farm on every hill?

MPs will be asked whether they want to respond to scientific advice and take action to leave a cleaner environment for future generations or whether they prefer to ignore the advice of scientists and squander the opportunity to tackle climate change.

They face a choice between a market-based reform and the discredited nostrums of subsidies and politicians picking winners.

Do they want to put a price on the carbon pollution of the largest polluters and use the revenue to assist households, support jobs and invest in clean energy?

Or do they want to back an alternative which would slug households with $1300 a year in extra taxes to pay for subsidies to the big polluters?

In the lead up to this vote, the Opposition has eschewed genuine engagement for a deceptive and cynical scare campaign over carbon pricing. What are the facts of the matter?

The Government is responding to clear scientific evidence: the atmosphere and oceans are warming, sea levels are rising and the world is already experiencing the impacts of climate change. Scientists have advised that the worst of these impacts can be avoided if the world reduces its carbon pollution.

A carbon price will give Australia’s biggest companies an incentive to search out the cheapest ways of lowering pollution.

It is not a tax on households or on the vast majority of businesses. It will apply to around 500 companies running large facilities emitting more than 25,000 tonnes of carbon pollution a year.

These facilities will pass some of the cost of the carbon price on to their customers. Some of these increases will reach householders, but the impact on the cost of living will be modest.

Treasury modelling shows there will be an increase of 0.7 per cent in the Consumer Price Index. Food and grocery prices will rise by 0.4 per cent. Electricity prices will rise by more: 10 per cent.

On average, households will face higher costs of $9.90 a week. The Government will deliver average household assistance worth $10.10 a week through tax cuts and increases in family tax benefits, pensions and allowances.

Almost six million households will get assistance covering the entire average price impact. Four million households will get assistance more than covering the impact.

Take a couple with two children where the main bread-winner is on $60,000 a year and his spouse works part-time earning $25,000. Their cost of living impact will be $570 a year, but they will get about $948 from the Government’s assistance package.

So why impose a carbon price on polluters and then compensate households? Because a carbon price will create powerful financial incentives to clean up industry, especially electricity generation.

Australia relies far more heavily on burning coal to generate electricity than most other developed countries. This is why we have the highest per capita carbon pollution of developed countries. A carbon price will transform our electricity sector towards natural gas, wind, solar and geothermal power.

Treasury modelling shows gas-fired electricity generation will expand by over 200 per cent to 2050 and renewable power will expand by an extraordinary 1700 per cent.

This is not a transformation to be feared; it is an opportunity to be embraced. It will ensure Australia remains competitive in the global low-carbon economy of the future.

When MPs vote on the clean energy legislation this week, those on one side of the House will be peddling the politics of fear, stoking xenophobia and ignoring scientific and economic advice.

Those on the other side will be helping to secure Australia’s environmental heritage while ensuring future generations benefit from a diverse, vibrant and prosperous low-carbon economy.

Greg Combet is the Federal Minister for Climate Change and Energy Efficiency