At a Clean Energy Council member event, hosted in conjunction with legal firm Baker & McKenzie, Senator Wong said “Australians recognise that we must act now on climate change. As Clean Energy Council members know, Australia’s transition to a low pollution economy will present great opportunities to those who recognise the problem and begin to find solutions.

“The Carbon Pollution Reduction Scheme and the expanded Renewable Energy Target will help Australia realise those opportunities.”

Senator Wong’s address followed the Federal Government’s release of two key consultation documents. The green paper on the CPRS sets out the Government’s proposals on the design of an emissions trading scheme for Australia, and a consultation paper on the Renewable Energy Target (RET) is’ aimed at advancing the development of renewable energy in Australia.

Reforming and transforming the economy

Before outlining some of the scheme’s key design proposals, Senator Wong recalled the scale of the emissions reduction challenge that the scheme is designed to meet – reducing Australia’s emissions by 60 per cent by 2050 at the lowest cost to the economy.

Acknowledging that to meet the 60 per cent reduction target, carbon emissions per dollar of real gross domestic product will need to decline much faster than any improvements seen in recent decades, Senator Wong outlined how the Federal Government believes this goal can be achieved.

Harnessing the potential of low-emission technologies is “an urgent first step”, she said. Secondly, Australia must develop and scale up technology that is near commercialisation – including innovative solar technologies.

A major investment in research and development is also required to find the big breakthrough technologies that provide zero emissions electricity. Finally, Senator Wong said that as low emission sectors begin to grow more rapidly than high emissions sectors, it is “the tough job that this Government is taking on” to manage the structural change to the economy in a way that deals with legitimate community concerns. And the CPRS will be the central mechanism through which the Rudd Government plans to deliver these economic changes.

“The scheme will fundamentally change the competitive position of clean energy sources in the economy,” she said. “Large scale investments in clean energy can be increasingly undertaken in the knowledge that the competitive forces of the market will reward your effort and initiative.

“Across the economy, the market will reward companies and industries that produce their goods and services in a way that contributes less carbon pollution to the atmosphere.”

Senator Wong concluded that under the proposed scheme the real costs of using fossil fuels will be recognised and the competitiveness of cleaner technologies will be improved.

Climate change politics

Addressing the politics of climate change, Senator Wong said it is in Australia’s national interest to act.

As one of the most at-risk developed countries in the world, she said that Australia must be part of the international negotiations to reach the next global agreement on reducing carbon pollution. To be involved in the global effort, she said, requires action at home. Moreover, Senator Wong said that Australia must be prepared for and take part in “the enormous global economic solution” as the rest of the world moves towards reducing emissions.

“With great economic opportunities to be gained by acting on climate change – and so much to lose if we don’t – it is squarely in Australia’s national interest to act,” she said.

Senator Wong pointed to the government’s plan to provide transitional assistance through a share of free permits to the most emissions intensive trade exposed activities.

The electricity generation sector will also be assisted through the proposed Electricity Sector Adjustment Scheme. Operating alongside existing Federal Government programs, Senator Wong said that the scheme would: underpin investor confidence in the sector; facilitate structural adjustment for individual firms, workers and regions; and, ensure security of energy supply.

Expanding the national renewable energy target

While the CPRS is the Government’s key policy to reducing emissions, Senator Wong said that the expanded RET of 20 per cent by 2020 will focus on delivering lower long term abatement costs by driving investment in renewables. As the CPRS matures, Senator Wong said that the expanded RET scheme will be phased out between 2020 and 2030.

Concluding, Senator Wong urged the industry to engage in consultation with the government.

“I am sure that the people here today stand ready to apply your resourcefulness and innovation to drive Australia towards a low carbon future.”