e have now had decades of heated publicargument and political opinion, alongsidedecades of enlightened scientific researchand economic analysis. After all thoseopinions have been expressed, most Australians nowagree: our climate is changing. This is caused by carbonpollution, this has harmful effects on our environmentand on the economy, and the Government should act. And after all that analysis has been done, mosteconomists and experts also now agree the best way isto make polluters pay by putting a price on carbon. Sothat is the policy of the Government I lead. And that isthe plan which is before the House now. A plan for a carbon pricing mechanism which meansaround five hundred big polluters to pay for every tonneof carbon pollution they put into our atmosphere. Aplan to cut carbon pollution by at least 160 milliontonnes a year in 2020. A plan for tax cuts, increasedpensions and increased family payments. A plan forclean energy jobs and investment. a plan for a cleanenergy future for our country. Today we move fromwords to deeds. This Parliament is going to get thisdone. There will be a price on carbon from 1 July2012. The carbon pricing mechanism, which beginsits course through our Parliament today, is the productof years of public policy discussion and development.In the late 1990s, the Australian Greenhouse Officepublished papers setting out how a carbon pricemight work and sought public submissions. Then theNational Emissions Trading Taskforce established bythe States and Territories, and the Shergold report setup by the Howard Government, embarked onextensive consultation processes. Each generatedwide ranging recommendations on designing themechanism for a carbon price.Further consultation on detailed design issues occurredthrough the Garnaut Review, the Green and WhitePapers, and in response to draft legislation supportingthe former Carbon Pollution Reduction Scheme,defeated in the Senate. In September 2010, theGovernment convened the Multi-Party Climate ChangeCommittee to agree a way forward. In February thisyear, the Government released a Climate ChangeFramework for public discussion. In July, theGovernment announced the carbon pricing mechanismand, later that month, released draft legislation. We received over 300 submissions on the draft billsand had extensive discussions with businesses, non-government organisations, other governments andlegal stakeholders. All adding to the literally thousandsof submissions which have been made to Governmenton this issue over the years. Many advocates andadvisers have worked enormously hard. I am gratefulfor the tremendous energy and seriousness with whichso many have treated these exhaustive - evenexhausting - discussions.All part of the years of research and analysis whichunderpin the policy embodied in the legislation Iintroduce today. I firmly believe no stone remainsunturned, no voice unheard. So this is the plan forAustralia's carbon price.A modern policy approach,with efficient allocation and incentive to innovate,linked to global markets. A fixed price for the firstyears, a well designed market from 2015. Assistancefor emissions-intensive, trade exposed industries.Evidence-based emissions targets. Abatement at thelowest economic cost. All adding up to a new bottomline: Where polluters pay.Let me turn to the main features of the Clean EnergyBill 2011. The Bill provides that the carbon price willTHECLEANENERGY BILL2011118G20 MEMBER COUNTRIESTHE HON JULIA GILLARD, PRIME MINISTER, AUSTRALIAW
G20 MEMBER COUNTRIES119Below: Australian PrimeMinister Julia GillardPhoto: UN Photo/Evan Schneiderbe paid by liable entities, which have facilities thatemit 25,000 tonnes or more of carbon pollution a year.It will also cover landfills that emit 10,000 tonnes ormore, where these are within a specified distance oflandfills that emit 25,000 tonnes or more. Large users of natural gas will be liable parties in theirown right, while natural gas suppliers such as retailerswill pay a carbon price for the emissions that arise fromthe use of the natural gas by smaller customers. Around500 entities will have mandatory liabilities under thecarbon pricing mechanism. Around 500 polluters willpay. To determine liability, the carbon pricingmechanism will draw on information reported under theNational Greenhouse and Energy Reporting System, anestablished measurement system for greenhouse gaspollution developed under the Howard Government andwhich commenced on 29 September 2007. The carbon pricing mechanism will not apply toagricultural emissions, legacy emissions from landfill facilities, and emissions from landfill facilities closed before 1 July 2012. The Bill recognisesthat there are different ways in which businessesstructure their affairs. It specifically deals with jointventures - a common feature of resource and energyprojects. And it allows businesses to transfer liabilityunder the mechanism within their corporate groups.The Bill provides for a fixed carbon price for three years,starting at AU$23 per tonne of carbon pollution. A fixedcarbon price, set out in legislation, provides businesswith certainty as our plan begins - and allows for amanageable transition to carbon pricing. After three years, the scheme automatically transitions to a fully flexible "cap and trade" emissions trading scheme. From this time on, a capwill be placed on national emissions and the carbonprice will be determined by the market. The Bill alsoprovides for a price cap and a price floor to apply forthe first three years of the floating price period. Thiswill limit market volatility and reduce risk forbusinesses as they gain experience in having themarket set the carbon price.At the heart of an emissions trading scheme is a cap oncarbon pollution. These caps will guarantee reductionsin carbon pollution and allow us to achieve our long-term target of an 80 per cent reduction from 2000levels by 2050. Achieving this target will take morethan 17 billion tonnes of carbon pollution out of theatmosphere between now and 2050. In 2050 this willcut 9 out of every 10 tonnes of pollution compared towhat would happen without our plan.Under the arrangements that this Bill would put inplace, pollution caps will be set by the Governmentwith advice from the expert, independent ClimateChange Authority. If caps are not set, then default capswill apply, which reflect Australia's unconditional,bipartisan commitment to reduce our greenhouse gaspollution by 5 per cent below 2000 levels in 2020. Toprovide stability and notice for business, cap-settingregulations will be made well in advance.The Bill makes provision for the Australian carbonpricing mechanism to interact with credibleinternational efforts to reduce carbon pollution.International linking gives liable parties access to abroader range of abatement opportunities, which helpscontain costs and helps promote international actionon climate change. Liable parties will be able to meet up to half of their obligation through the use of international carbon units. This will ensure that only robust,environmentally credible international units areallowed to be used for compliance. nThis article is an excerpt from Prime Minister Julia Gillard'sspeech introducing the Clean Energy Bill 2011 to theParliament in Canberra on 13 September 2011.