I am sure many of you have been following the debate and commentary regarding the recent Gillard’s Government’s announcement in relation to work that has commenced to set a carbon price.

There has been a great deal of noise and misinformation hitting our airwaves. I asked my Federal colleague, Dr Andrew Leigh, Member for Fraser, if he could provide me with some factual information. He has kindly done this. You can read his article here.

Of course, there is no better place to start informing ourselves than the current series of updates to the 2008 Garnaut Review. This is very accessible material on both the science and the economics and provides some handy information and arguments to inject into conversation and discussion. You can access this by going to http://www.garnautreview.org.au/

We know that acting on climate change isn't just the right thing to do; it is also an essential economic reform.

A carbon price will cut pollution, drive investment in clean energy and provide business with the certainty they need to make future investments. A carbon price will also help ensure the long term competitiveness of our economy.

Australians are the biggest polluters per capita in the developed world, even more than the United States of America. Our climate is changing and we need to reduce carbon pollution now.

Acting Now

As Prime Minister Julia Gillard said, history teaches us that in times of historic change, like the industrial and technological revolutions, the countries and economies that prosper are the ones that lead and shape that change.

If Australia was to be left behind right now it would risk the jobs of the future and threaten our long term prosperity.

We have been talking about action on climate change for decades – it’s time to stop talking and get on with the job.

Now is the right time to act.

A carbon price and how it will happen

Our two-stage plan for a carbon price mechanism will start with a fixed price period for three to five years before transitioning to an emissions trading scheme.

The Government will propose that the carbon price commences on 1 July 2012, subject to the ability to negotiate an agreement with a majority in both houses of Parliament and pass legislation this year.

A carbon price is a price on pollution. It is the cheapest and fairest way to cut pollution and build a clean energy economy. It is the right and necessary thing to do.

The best way to stop businesses polluting and get them to invest in clean energy is to charge them when they pollute.

The Government will then use every cent raised to:

• Assist families with household bills;
• Help businesses make the transition to a clean energy economy; and
• Tackle climate change and invest in a clean energy future.

A carbon price will mean that the businesses with the highest levels of pollution will have a very strong incentive to reduce their pollution.

Importantly, a carbon price does not operate like the GST. While over time goods which require a lot of pollution in their production will cost more compared to goods that don’t require a lot of pollution, only businesses which emit thousands of tonnes of carbon pollution will directly pay a carbon price.

Next steps

The Multi-Party Climate Change Committee will focus on other important elements of the proposal including the starting level of the fixed price, any phasing in of sectors of the economy, and assistance for both households and industry. The Government will continue to consult with and seek advice from key stakeholders, including through the Non-Government Organisation and Business Roundtables on Climate Change.

Members of the public and interested parties who wish to provide input on this approach should contact: MPCCC@climatechange.gov.au, or write to:

The Multi-Party Climate Change Committee Secretariat
GPO Box 854
Canberra ACT 2601
Australia”