18 December 2008
Interview on ABC2 News Breakfast
Topics: Carbon pollution reduction scheme, trade talks
JOE O’BRIEN: The release of the Federal Government's highly anticipated carbon emissions reduction target this week drew criticism from both sides of the global warming debate.
VIRGINIA TRIOLI: Green groups slammed the five percent target saying it fell far short of what was needed, while business and industry groups have warned Australia's economy and consequently its trade prospects could suffer under the scheme.
Federal Trade Minister Simon Crean joins us now to talk about that and many other issues. Simon Crean, good morning.
SIMON CREAN: Good morning, Virginia.
VIRGINIA TRIOLI: Can you guarantee that no jobs will go overseas as a result of the emissions trading target and the carbon reduction scheme?
SIMON CREAN: Well that's the purpose for having the compensatory measures in there for the export intensive exposed industries. There's not much point putting a rigour on yourself here that's not going to be applied overseas if all we do is see the jobs go overseas.
But, Virginia the other part of this package isn't just about the threat of jobs going overseas of which we've got to be mindful, it's also the opportunity that this challenge creates for us to create new jobs, green jobs. We've already seen it in the restructuring of the auto sector whereby the auto industry is going to have to re-tool for lesser carbon footprint, lower fuel consumption. This is where Australia is very well placed; in the technology and design stakes. If we can get that right we won't only be regenerating a new industry here, we will be exporting it. And it's the green job opportunities, not just the threat of climate change but the opportunity through green jobs that really opens up a lot of doors for Australia if we do it properly.
VIRGINIA TRIOLI: Can I just - just clarify something though. It just seemed just from the beginning of what you said there, Simon Crean that the compensation package is an implicit recognition and therefore compensation for what might be potential jobs being lost here or going offshore.
SIMON CREAN: No, I think that what we've had to deal with in developing this very complex area is firstly the requirement to take a lead but not be so far out in front that we just lose the industries. That's the concept of carbon leakage. At the same time we do have to send a signal that if we don't act now the cost of dealing with this problem is going to be much greater in the future.
I think that's the argument that has got through. The question then becomes how do you deal with the circumstances in which we haven't yet got a global commitment, that we have to be at the leading edge of trying to drive that global commitment. And what do we do in the compensatory measures for people with the higher prices especially low income families, what do we need to do in ensuring that those industries that without any compensating measures would run the risk of the carbon leakage.
There's no point sending our aluminium industry off overseas because it's cheaper and they don't have to comply if in fact they're worse polluters. And this is the issue with LNG, it's a cleaner fuel. We've got to try and encourage the framework globally in which there is recognition through the market of that differentiation. That's what we're trying to do, and Australia as a big energy producer has to be at the leading edge of trying to design this scheme.
This has been the problem with the inaction under the previous government because we didn't have a seat at the table. Now we have a seat at the table we've got to drive it as aggressively as we can, but not put ourselves so far out in front that no one else is doing anything and we're exposing our industries.
JOE O’BRIEN: Now you've mentioned compensation, heavy industry is demanding more compensation. Is there any likelihood they're going to get it or is that it?
SIMON CREAN: No I think that there's been a very intensive process gone through here. I mean this is the white paper, it is a development on the green paper, there has been a lot of consultation with industry, there's been a lot of involvement through the Cabinet processes. This isn't just being looked at from the perspective of the environment, as important as that is because that's the challenge, it's also being looked at from the impact of the economy. And that's the balance that we've got to get right.
Now we will be on the basis of the white paper putting out for exposure the draft legislation. This is where we think we have got the balance right.
VIRGINIA TRIOLI: Minister let me move you onto another subject, and that's the Doha round of talks. You're disappointed that it looks like there won't be a ministerial meeting continuing these talks before the end of the year. What does that mean for us?
SIMON CREAN: I think it's very disappointing. You look around the world, Virginia, every country is saying we have to inject fiscal stimulus into the economy to kick start it. Economies are tanking all round the world, economies are prepared to put in a lot of fiscal stimulus. But what's the point of putting in the fiscal stimulus if you don't generate the multiplier? The multiplier is trade. World trade grows faster, three times historically, than world output.
So if we're serious about the fiscal stimulus, why not engage the multiplier? That's what's frustrating about not having been able to get this ministerial meeting in December.
VIRGINIA TRIOLI: Just finally, very quickly then because we're short of time, is all the fiscal stimulation a complete waste of money if we don't have the trade talks that are going to continue the inter country trade?
SIMON CREAN: It won't be as beneficial unless we impact the multiplier. That's the point. What we've got to do now - we just can't wait now until the Obama administration takes over. I mean this limbo period was the most frustrating thing that I've had to deal with in the last week or so. But with the Obama administration coming on 20th January we need to start from day one thereafter to re-engage this political will.
VIRGINIA TRIOLI: Minister, good to see you. Thanks so much.
SIMON CREAN: Thanks very much.
[Ends]
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