As the PM ramps up attack on Labor’s promised emissions trading scheme, the communications minister admits all emission reduction policies come at a cost

Malcolm Turnbull has cut through the slogans and semantics dominating the climate policy debate – pointing out that all policies to push low-emission electricity generation come at a cost to households, including the ones the government supports, and that the cost of renewables is falling.

Tony Abbott on Monday unveiled a new three-word slogan to attack Labor’s promised emissions trading scheme – saying it was an “electricity tax scam”. The prime minister also labelled Labor’s promise to source 50% of electricity from renewables by 2030 “bizarre” and “unnecessary”, said it would cause “a massive overbuild in windfarms” and claimed it could cost “$60bn or more”.

At his party’s national conference over the weekend, Labor leader Bill Shorten said Labor’s promised ETS was not a tax because it would have a floating price and would not begin with the fixed price like the former government’s scheme.

“Let me say this to our opponents, in words of one syllable: an ETS is not a tax,” he said.

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The government has insisted that an ETS – whether it has a fixed or floating price – is a tax.

The environment minister, Greg Hunt, has said “an emissions trading scheme is just a carbon tax with a different name” and “only the Coalition will combat climate change without hurting Australia’s standard of living”.



Asked about this debate on Monday, Turnbull – who lost the Liberal leadership over his support for an emissions trading scheme – said there was usually a distinction drawn between an ETS and a tax.

But he said every policy to push low-emissions generation came at a cost – which might in generic terms be called a tax – even the renewable energy target which the government itself supports.

“There has been a distinction drawn in the debate ... between a fixed-price cost on carbon which people particularly called a carbon tax and one that is floating because it is related to the purchase of permits and that, of course, the price of the permits depends on supply and demand and that’s an ETS. And so in a lot of the literature and discussion you’ve talked about the virtues of a tax versus the virtues of an ETS,” he said.



“But either way they are both a cost. So, yes, you can call them both generically a tax but equally the renewable energy target is a cost. So all of these measures, there is no such thing as a cost-free way of reducing carbon emissions. That is to say, as long as emissions-intensive forms of generating energy are cheaper than the low-emission forms and, of course, that is starting to change, the technological developments with solar in particular.

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“But as long as that is the case, whether it’s a regulation, whether it’s a renewable energy target, whether it’s an ETS, whether it is a carbon tax, a fixed price, all of those can be seen on as a cost on the business of generating energy, therefore a cost on householders purchasing energy and therefore in that sense a tax.”

The government recently persuaded Labor to agree to a reduced renewable energy target of around 23% of electricity generation by 2020. Abbott said Labor’s goal to achieve 50% renewables by 2030 was “bizarre”.

“Frankly at 23% that is more than enough, one of the truly bizarre decisions coming out of the Labor conference at the weekend was this move to increase the proportion of renewables in our system to some 50%. This constitutes a massive, absolutely massive, hit on consumers and jobs, because to move to 50% ... by 2030 will mean a massive bill, perhaps $60bn or more ... this massive and unnecessary commitment to renewables which will cause a massive overbuild of windfarms, all of which has to be paid for by consumers,” Abbott said.

Labor has not costed its renewables goal, but says it will be achieved through a suite of policies. The $60bn estimate appears to be based on the assumption that it would be reached through the current mandatory renewables market, but Labor says this is not the case. It is also highly unlikely to be delivered primarily through windfarms.