DAVID SPEERS:  Well, let’s go to Rome now, where the G20 Summit is being held ahead of the Glasgow Climate Conference. The Minister for Industry, Energy, and Emissions Reduction, Angus Taylor is there, and I spoke to him earlier this morning. Angus Taylor, welcome to the program.

ANGUS TAYLOR: Thanks for having me, Speersy, great to be with you.

DAVID SPEERS: Well, let’s start with the question you asked of Labor before the last election. What is the cost to taxpayers of your net zero plan?

ANGUS TAYLOR: Well, the whole purpose of the plan is to avoid imposing costs on Australian’s by deploying technology which has been the great engine behind human history and solving hard problems, avoiding imposing those costs by deploying technology and not deploying taxes. Now we are investing $20 billion in targeted R&D expenditure. We’ve been laying that out over the last several years, how we’ll spend that money, prioritising key technologies like clean hydrogen, low emission steel and aluminium, regenerating our soils to absorb carbon using good agricultural practices, carbon capture and storage, stored energy. These are the technologies we know cannot just reduce emissions for Australia, but reduce emissions around the world, David and that’s why we’re focussed on those technologies, that’s how we do this, it avoids damaging our traditional industries, agriculture, heavy manufacturing, and mining and resources but at the same time, we know these technologies can bring down emissions and achieve our net zero target by 2050.

DAVID SPEERS: Okay but just sticking with this cost question. The $20 billion you mentioned there, is just for this decade. The heavy lifting under your plan, is what comes after 2050. So, what’s the full cost to get to net zero?

ANGUS TAYLOR: Well, that run rate of the money we’re spending over the next decade, is what we’d expect into the future and the key to this is by investing into…

DAVID SPEERS: So another 20 for the next decade, and another 20 for the following decade?

ANGUS TAYLOR: Well, no. The key to this is by investing in R&D, spending on technology, which we do as a country in significant way, as it is, prioritising those technologies that can bring down emissions, we allow the private sector to deploy these technologies, to invest in them, households, businesses, in a way which strengthens their businesses, and which is good for them and that enhances the economy, and it’s why we’re confident we can actually create jobs through this plan. We can strengthen the economy through this plan, and not do damage to those traditional industries.

DAVID SPEERS: And I understand that’s what you’re hoping, but just to be clear, what are taxpayers going to have to pay under your plan, to get to net zero?

ANGUS TAYLOR: Well, taxpayers are not paying anything. We’re not raising taxes. I mean, that’s the important point here. We’re not raising taxes.

DAVID SPEERS: Well, you’re using taxpayers’ dollars… You’re using taxpayers’ dollars, right? Which could either be used to pay off debt or spend on hospitals, or whatever. You’re using taxpayers’ dollars. $20 billion you mentioned to get to 2030. To get to net zero by 2050, what’s the cost to taxpayers?

ANGUS TAYLOR: Well, let’s be clear about what the $20 billion is. That’s money that we’ve invested through ARENA, CEFC, CSIRO, the Climate Solutions Fund, a range of different sources, to bring down the costs of those technologies, so they can raise productivity, strengthen the economy, and grow the economy. So, it’s not going to- the whole point of this, is we don’t need to raise taxes, David.

DAVID SPEERS: I’m not asking you whether you’re going to raise taxes. I’m just asking what the total cost is? Is it $20 billion? Is that the total cost, to get to net zero?

ANGUS TAYLOR: Well, I’ve answered your question. 

DAVID SPEERS: With respect, you’ve said the $20 billion is through to 2030.

ANGUS TAYLOR: I’ve answered your question.

DAVID SPEERS: Is it $20 billion in total? Are you suggesting that’s all taxpayers will have to stump up?

ANGUS TAYLOR: To put us on target, to reach those outcomes on clean steel, clean aluminium, stored energy and hydrogen over the next 10 years, we’ve allocated $20 billion of funding, though those sources that I’ve been describing. Future governments will allocate as they see fit, in the 2030’s and 2040’s. I’m not going to commit future governments in the 2030’s and 2040’s but that’s what we need. We don’t need to raise taxes.

DAVID SPEERS: Well, this is your plan though. Your plan’s still 2050.

ANGUS TAYLOR: We don’t need to impose a carbon tax. 

DAVID SPEERS: Will they need to? Will future governments need to?

ANGUS TAYLOR: Future governments will do what they see appropriate to get to these targets. The targets that count are targets like getting the cost of hydrogen under $2 per kilogram, getting the cost of clean steel to $700 or lower per tonne. Getting the cost of aluminium to $2200 a tonne. Now we’re investing what we need to, to put us on a pathway.

DAVID SPEERS: OK so future governments may have to spend a lot more.

ANGUS TAYLOR: Well, what a government in the 2040’s or 2045, or 2047 spends, will be up to that government. I’ll tell you what we’re doing, which we’re confident will put us on track to reach those targets, is we are spending $1.1 billion. We’ve committed more than that to clean hydrogen, these are the initiatives we’ve been putting in place now for over two years. We announced the technology investment roadmap September last year, you’ll remember that well. We set those targets. We’ve now laid out on page 48 of our 128-page plan, when we expect to reach cost competitiveness, and we’ve laid out what we’re doing over the next 10 years to put ourselves in a position to achieve that.

DAVID SPEERS: Okay, well let’s go through that plan. Let’s go through that plan. It suggests you’ll get up to 20 per cent of the emissions reduction through domestic and international offsets. The domestic offsets include carbon farming but you’re now going to limit that because the Nationals are worried about locking up productive agricultural land, is that right?

ANGUS TAYLOR: Well, there are many sources of offsets. There’s not just one. You’re referring to one particular one, which is native vegetation, there’s also savannah burning, with the Indigenous ranges in the north, which has been extremely successful. Wonderful for the Indigenous communities in Northern Australia. Regenerating our soil, soil carbon, we see enormous potential there. It’s building slowly but we’ll start building much faster in the coming years as we bring down the cost of measuring that soil carbon. We want to get that cost down to $3 per hectare per year, and we know at that point it will be widely deployed by farmers. We also see potential for targeted high integrity offsets with our neighbours in the Pacific. This is a very important initiative, which will help them to put low emissions technologies in place, strengthen our relationship with them, and help to reduce emissions. So, great all round.

DAVID SPEERS: Well let me ask you about that, because these international offsets, the coalition used to strongly oppose. Tony Abbott called in the national offsets a form of a carbon tax. So, how will this work? Who’s going to buy these international carbon permits, under your plan?

ANGUS TAYLOR: Well, at the moment, the purchase of credits is being done primarily through the Emissions Reduction Fund, or Climate Solutions Fund, which is an initiative that was set up when Tony was Prime Minister, as you’ll remember well. That’s where the offsets are being bought but what we are seeing now is a voluntary market emerging very quickly. Grant King, when he did a review for us on the Emissions Reduction Fund and providing incentives to get technologies deployed as they approach competitiveness, recommended that we broaden it out to include high integrity credits from our neighbours. This is not credit from the other side of the world, this is working with our close neighbours to bring down their emissions and at the same time, help to provide offsets and strengthen the relationships with them.

DAVID SPEERS: But my question is, who’s going to buy them to achieve the emissions reduction in your plan? Will it be the Government? Will the Government buy any of these international permits?

ANGUS TAYLOR: Well, as I said, at the moment, the source of purchasing all offsets, or credits, is through the Emissions Reduction Fund, that’s not new. We committed an extra $2 billion to that in the Climate Solutions Fund just before the last election.

DAVID SPEERS: So, just explain that to people though, that’s the Government buying these permits, right?

ANGUS TAYLOR: That’s one source but what we’re seeing is very rapid growth of purchase of credits on the voluntary market. So, for instance, if you’re a gas company, you want to offset your credits, because you have your own internal target, or a mining company, and they all increasingly have these targets, you’ll need to buy offsets, and we expect, and we’re already seeing, those companies, buying offsets voluntarily.

DAVID SPEERS: Yeah, they don’t have to do it. You’re not requiring anyone to do it. 

ANGUS TAYLOR: No, they don’t have to do it, but they’re doing it at a very rapid pace.

DAVID SPEERS: But if you’re going to achieve, under your plan, 10 or 20 per cent of the emissions reduction through offshore permits, government’s going to be buying them, what’s that going to cost taxpayers? And is that on top of the $20 billion cost earlier?

ANGUS TAYLOR: Hang on. First of all, I’d say we are spending money on a range of different offsets, so the offshore credits is one piece of that, and that was the point I made a moment ago. So, it also includes soil carbon, it also includes...

DAVID SPEERS: How much, though? How much are you spending?

 

ANGUS TAYLOR: Well, as I say, we’ve already committed $2 billion in the Climate Solutions Fund and we’re still spending the remainder of the Emissions Reduction Fund.

DAVID SPEERS: But how much between now and 2050?

ANGUS TAYLOR: The $2 billion is the vast majority.

DAVID SPEERS: Yeah, to get to net zero, though, is my point. 

ANGUS TAYLOR: That’s what we’ve committed over the next decade. Look, governments don’t commit beyond the next decade. That’s how it works...

DAVID SPEERS: But this is a 2050 plan. I’m sorry, Minister, this is a 2050 plan, right, not a decade plan.

ANGUS TAYLOR: Yes, it is.

DAVID SPEERS:  You’re going to have to spend more than what you’re talking about between now and 2030, aren’t you?

ANGUS TAYLOR: What we have laid out is what we need to do over the next ten years to get ourselves on the pathway to get to net zero by 2050. What a government does in July 2048, will be for that government in July 2048, but we’re very confident, at the run rate we’re going at over the next decade, we’ll be in a position to achieve the outcomes we need to achieve to put ourselves, not just to the pathway to net zero 2050, but to get to our 2030 projections, which are currently a 35 per cent reduction over the period between now and 2030. So that’s the commitment we’ve made, David.

DAVID SPEERS: That’s a long way from zero. So, so far, we’re looking at, what is it? $20 billion from the roadmap you mentioned earlier, $2 billion on the offsets, that’s just to get us to 2030.

ANGUS TAYLOR: No, the $2 billion in the Climate Solutions Fund is included in the $20 billion.

DAVID SPEERS: Okay, okay. Then I want to ask you about carbon capture and storage, because you put some more money into research of this but if it works, carbon capture and storage, it’s still very, very expensive. Some estimates are five or six times the cost of renewables and batteries. Who would pay for that?

ANGUS TAYLOR: Well, it’s exactly the same mechanism, and Santos is already progressing quickly on a project at Moomba, under the Emissions Reduction Fund at the same price the Emissions Reduction Fund has been running at, so it’s been running it below $20 a tonne, I mean, that’s not new. That’s a pre-existing model, established under Tony Abbott.

DAVID SPEERS: Would you expect coal-fired power stations and manufacturers to use carbon capture and storage just because they want to? Or would you actually require them, or would you give them some taxpayer incentive?

ANGUS TAYLOR: Well, we’ve been very clear, we’ve established a methodology under the Emissions Reduction Fund, which carbon capture and storage can access. We’d also expect voluntary credits to play a role in this over time as well. The truth is that we know there are very low-cost ways to achieve carbon capture and storage. I’m sure there’s very high-cost ways to achieve it as well. We expect, initially the majority will be capturing the CO2 from the extraction of gas from gas wells. Over time, it could extend well beyond that. Hydrogen production, of course, is one area where we expect to see significant carbon capture and storage. This is happening at a rapid rate around the world, there’s some real misconceptions about it. There’s 60 carbon capture and storage projects around the world, the vast majority of them in the United States and we expect to see a lot more over time. 

DAVID SPEERS: Well, a lot of them are proving hit-and-miss and a lot of them are proving very, very expensive, to be clear. I’m just wanting to establish, though, again, the cost question here. You’re not suggesting more taxpayers’ dollars to subsidise very expensive carbon capture and storage?

ANGUS TAYLOR: No, we’ve been very clear about our policy on carbon capture and storage. We’ll support making sure that the Emissions Reduction Fund can access credits for carbon capture and storage, Climate Solutions Fund will access those. We’ll expect to see voluntary purchases of those credits over time, and we are very confident that good carbon capture and storage projects can be established within that envelope and we expect to see a lot more of them in the coming years.

DAVID SPEERS: Okay, so coming back to where I began. On the cost of this plan, just to be clear on this, for viewers. It’s $20 billion between now and 2030, you’re then hoping that, after that, everything will be okay. Businesses will voluntarily take up these new technologies. We won’t have to spend any more, as taxpayers, to get to net zero?

ANGUS TAYLOR: So, David, we’re committing between now and 2030, we’re looking 10 years out. Governments often only look only four years out. We’ve looked 10 years out. We’ve established a pipeline over the next 10 years of what we’re spending, and part of the reason for that is to make sure we’re getting the private sector investment coming in, so they can see the pipeline of support we’re providing over that 10-year period. What a government does in the late 2040s is a matter for them, but we do know that between now and 2030...

DAVID SPEERS: So this is really only a 2030 plan?

ANGUS TAYLOR: Well, it’s a 2050 plan, but it’s the 2030 policies that put us on track to achieve that. 

DAVID SPEERS: Okay, but it’s only to 2030.

ANGUS TAYLOR: Well, David, as I say, we are not going to bind a government as to what they should spend in the 2040s. That will be up to them. I think we’re getting into a very esoteric argument about something 25 years from now. What we can control, as a government, is a pipeline of initiatives and programs that allow us to put us on track to get the cost of these crucial technologies, clean steel, clean aluminium, stored energy, clean hydrogen, soil carbon, to the point where private sector deployment happens because it’s good for those investors, where it’s good for those businesses, where indeed it’s good for those households. That’s the goal and that means you avoid having to pay the very significant costs of having a carbon tax. At the end of the day, there’s two ways to bring down emissions: one is to reduce the cost over time of low-emissions technologies, the other is to raise the cost of traditional fuel sources and technologies. We’re about lowering costs, we’re making very targeted investments, using the R and D capacity of the government to do that.

DAVID SPEERS: Okay. To be clear, though, there’s a cost to taxpayers, $20 billion for now, and you can’t say what it’s going to cost after 2030 to get the big emissions reduction down to 2050. You’re hoping it won’t cost a thing but there are plenty who believe some sort of price mechanism would be a better way to go, whether it’s the Business Council, whether it’s a lot of other countries, whether it’s the UN, whether it’s Mathias Cormann. Are you going to catch up with him, and have you spoken to him about it?

ANGUS TAYLOR: Yeah, I have spoken to Mathias since I’ve been in Rome. The important point I’d make to you is this, David - you can either reduce the cost of low-emissions technologies, or increase the cost of traditional fuel sources. Our view, from the work we’ve done, is we can get the cost of low-emissions technologies to a point where they’re cost-competitive in reasonable time-frames that will allow us to get to net zero by 2050. We’ve laid out the funding for that pipeline over the next 10 years, which is a much longer time period than governments would normally do, and on the back of that, and the work that’s going on around the world, the partnerships we’re forming with Singapore, with Germany, with Japan, with the United Kingdom, and others, working with them to get those costs to a point where they will be deployed by the private sector, they’ll be deployed because it’s good for those investors, good for those businesses, and brings down emissions at the same time.

DAVID SPEERS: Finally, the Glasgow summit that you’re heading to, it’s all about the 2030 target. Most developed countries are increasing their 2030 ambition. Australia’s taking the same target, the 26-28 per cent. Why won’t you budge on this? And why won’t you even take to the next election a promise for a higher target?

ANGUS TAYLOR: Well, we went to the last election and we said to the Australian people we had a 26-28 per cent target. Labor had a 45 per cent target without a plan as to how they were going to achieve it, and the Australian people put us back into government for another term. Now, we need to keep faith with our commitments to the Australian people.

DAVID SPEERS: Why won’t you go to the next election with a higher target?

ANGUS TAYLOR: Well, you know, I’ve been very clear about this, David. We asked the Australian people at the last election what they wanted...

DAVID SPEERS: I’m asking about the next one. What about this coming election?

ANGUS TAYLOR: …and the choice was very clear, they made it very clear. Well, you know, this is our policy. We’ve got absolutely no plan to change it, none whatsoever.

DAVID SPEERS: Why not? That’s what I’m asking. Why won’t you got to the election with a higher target?

ANGUS TAYLOR: Because the Australian people told us two-and-a-half years ago what they thought the right answer was, and we’re sticking with it. Now, the good news is, we’re going to meet and beat that target. We’re going to reach up to 35 per cent reduction in emissions. We’ve improved on our position versus 2030, as we did with 2020, every year, and our goal is always to meet and beat our targets but we set a target and we’re going to keep faith with the Australian people on that target.

DAVID SPEERS: Angus Taylor, we will have to leave it there, but thanks so much for joining us from Rome.

ANGUS TAYLOR:  Good on you, thanks David.