Andrew Leigh

Consistency isn't everything, but it's astonishing to see how far some members of the Liberal Party have shifted from their commitment to market-based approaches to deal with climate change. So I gave a speech last week that drew together some (very recent) statements by Liberal Party members on the topic.

Carbon Pricing
22 March 2011

Tonight I rise to speak about the Liberal Party’s backflip on using market mechanisms to deal with dangerous climate change. We have heard in parliament today quotes from the honours thesis of the member for Flinders, Greg Hunt—a work titled ‘A Tax to Make the Polluter Pay’. We have heard in the media from the member for Wentworth, Malcolm Turnbull, who articulately argued that the most cost-effective way of reducing Australia’s greenhouse gas emissions is through a market based mechanism. The Liberal Party in their 2007 election policy document informed us:

Climate change means we must undergo a fundamental transformation to a low-carbon economic future.

A re-elected coalition government will establish an emissions trading system, the most comprehensive in the world, to enable the market to determine the most efficient means of lowering greenhouse gas emissions.

These views were held by Liberal Party representatives as recently as 16 months ago. Senator Alan Eggleston on 30 November 2009 said:

One way of avoiding the volatility of an emissions trading scheme would be to have a carbon tax. A carbon tax provides a very steady and known price for carbon, if you like, which is only varied by varying the tax. That tax can be set at a level that allows renewable energy systems to be competitive.

Senator Sue Boyce said on 30 November 2009:

My own background is as a manufacturer. In that sphere, I know the benefits of early adoption. I would just like to point out to the Senate that it was the Shergold task force, commissioned by the Howard government, who said, long before we got to this place, that Australia should not wait until a genuinely global agreement has been negotiated, because there are benefits which outweigh the costs in early adoption by Australia of an appropriate emissions constraint.

Senator Judith Troeth said on 30 November 2009:

By having a price on carbon, people can decide whether they really want to use these carbon-intensive products. It is an effort to move people away from carbon towards other alternatives, and the most effective and efficient way to do this is through a price signal.

The member for Dunkley, Mr Bruce Billson, claimed credit for the last market based mechanism, saying on 29 October 2009:

It was actually the coalition that instigated work on the emissions trading scheme. In fact, I have in my hand a report that I helped author back in 1998 which talks about regulatory arrangements for trading in greenhouse gas emissions—1998!

The member for Mayo, Mr Jamie Briggs, said on 3 June 2009:

I believe an emissions trading scheme is one of the policy levers that can be used to change the energy mix in Australia. An ETS will be, by definition, a price on carbon.

The member for Cook, Mr Scott Morrison, said on 3 June 2009:

There are a suite of tools we need to embrace to reduce emissions. I believe an emissions trading scheme is one of those tools in one form or another. Placing a price on carbon, as the Leader of the Opposition has said, is inevitable.

The member for Paterson, Mr Bob Baldwin, said on 3 June 2009:

I would like to make it clear: the coalition will support an emissions trading scheme …

We know the Liberal Party used to stand up for the market. Former Prime Minister John Howard told Tony Jones on 5 February 2007:

That doesn’t sound very much to me like a market mechanism, when you compel somebody to apply a particular technology. It is far better, if you want to keep faith with the market approach, to develop a carbon pricing or carbon trading system …

The member for North Sydney, Joe Hockey, was quoted in the Sydney Morning Herald on 17 April 2010 as saying:

There has been a distortion … There’s an argument that over time we haven’t paid a proper price for water. We haven’t paid a proper price for fossil fuels. We haven’t paid a proper price for land, etc. You would hope you can remove the distortions.

Climate change is real and it is not only happening in the environment but also happening in the Liberal Party room. A party that once had a proud tradition of supporting markets has now fallen victim of the populism of direct action. As the temperature goes up on the Leader of the Opposition, let us see whether the Liberal Party can again find its faith in markets.