KIERAN GILBERT: Minister for Industry, Energy and Emissions Reduction are Angus Taylor. Thanks for joining me from London. You're on your way back home after leaving Glasgow. Tell me, were you optimistic when you left the climate talks that there is going to be a deal that realistically can limit global warming to 1.5 degrees. 

ANGUS TAYLOR: Well, I am optimistic there is great progress being made, Kieran and when I was in Madrid two years ago at the previous COP it was clear to me we needed a more technology led approach.  I made that point in my national statement back two years ago, and that we needed more private sector involvement if we're going to solve this problem and do it in a way that reconciles bringing down emissions with stronger economies, not just for Australia but across the world.  Of course that's what we have been seeing at this COP, particularly from Australia.  We've had an extraordinary number of Australian businesses up there showing their wares.  We've had a focus on a technology led approach, getting those technologies to cost competitiveness.  That's been extremely well received and of course that is the key, not just for bringing down Australia's emissions but across the world.  The Glasgow breakthroughs are all about achieving exactly that, focused on technologies like hydrogen and clean steel, and this is the way forward.  I think there's been enormous acceptance of that and the combination of government facilitating the private sector investment, the development of these clean energy technologies that will get us there, and I'm very optimistic that we're setting ourselves on the right pathway. 

KIERAN GILBERT: What about China?  It is the biggest emitter in the world.  Their president did not show.  Have they been constructive?  Are they being constructive there? 

ANGUS TAYLOR: Well, obviously China is hugely important to global outcomes.  As you know, Kieran, they are a third of total emissions, and that makes their contribution very important but I've got to say, and what is very clear, is that China is focused on technologies, on bringing down emissions in a way which reconciles economic growth with emissions reduction is very clear.  They are making very significant investments in that area.  And it's that practical approach that I think is winning out. 

KIERAN GILBERT: Are they being constructive?  

ANGUS TAYLOR: Well, they're being absolutely constructive in making sure there's investment in technologies that can get their emissions down, and emissions down across the world but you know they're reflective of developing countries across the world, which is they're not going sacrifice economic growth for emissions reduction.  You know that's not just true of China, it's India, South East Asia.  We are in the part of the world where this issue is the key one, and it's why our message, which is a very simple one, don't sacrifice economic growth, don't raise the cost of energy, don't wipe out jobs, use technologies in a way to solve this very hard problem as humans have for a long, long time. I think that message is being very well received. 

KIERAN GILBERT: So the 1.5 degrees, that can be achieved?  You've left Scotland, you're about to heavy the UK.  You're confident that can be achieved? 

ANGUS TAYLOR: It is a very difficult outcome to achieve. There's no question about that. Everyone has understood that from the start. Indeed, from back when the Paris agreement was put together it was understood that that was always going to be extremely challenging. Now I'm not going to predict the final outcomes of the political conference. What I am going to say is this conference is recognizing, and world is recognizing, that the way to actually achieve the best possible outcomes is by deploying technologies, the good projects with private investment facilitated by government. Rather than government coming in and telling people what to do. That is the very clear message that we've been sending and it's been extremely well received. This is the pathway forward. 

KIERAN GILBERT: That's one side of the coin.  The UK is spearheading a push to end fossil fuels, particularly coal.  We've got dozens of coalmine projects basically on the table.  Do they risk becoming stranded assets now given where the world is shifting? 

ANGUS TAYLOR: Well, I think this is the wrong way of looking at it, Kieran.  One way of looking at this problem is to say here's all the things we've got to shut.  The other way of looking at it is to say here's what we have got to do with low emissions technologies to make them competitive.  So people will choose what is good for them and good for bringing down emissions at the same time.  

KIERAN GILBERT: But that's the UK.  The UK doing it, isn't it?  It's not me doing it, it's the UK doing it. 

ANGUS TAYLOR: Yeah, and I'm not saying you're doing it, Kieran.  I'm telling you what our position is on this, which is that the key is to bring down the cost and improve the performance of those low emissions technologies, whether it's solar, where we're setting a goal now of getting down to 1.5 cents a kilowatt hour.  We've very confident we can achieve that relatively quickly.  Getting the cost of plain steel to a point where it's competitive with traditional steel production.  I mean this is how you do it.  Now there is a different approach, which is to say let's just go and shut a whole lot of stuff.  That is not our approach and you know it's interesting to see the Americans have not signed up to that coal pledge. They recognize the power of technology.  They recognize that a technology led approach with the private sector backing that in facilitated by government is the way to do this. And I think that's been very clear from what we are seeing at COP. 

KIERAN GILBERT: You said that companies will increasingly purchase carbon credits willingly when they set their own goals, targets and so on.  At what point does that become a private sector led framework as opposed to the government buying the credits, as is the case now in Australia? 

ANGUS TAYLOR: Yeah, it will evolve over time. I think we've obviously funded the climate solutions, funded the emissions reduction through to 2030. There's an important role for government to play, but there's no question that voluntary markets and the role of the private sector will be increasingly important. I mean we see reports every day of a company setting a target. That's great. You know knock yourself out.  Set a target. But I tell you what if you're going to set a target, we're held to account, so should the private sector be, and that means they'll have to buy credits on a voluntary market to make those outcomes. Look, we're seeing this grow very, very quickly. It will benefit agriculture, industry, other sectors in the economy, transport, where we have crediting mechanisms either in place or going into place.

KIERAN GILBERT: It looks to me like that it could evolve into an emissions trading scheme.  Is it fair to say that, that it could evolve into an emissions trading scheme type setup if that's driven by the private sector in that way? 

ANGUS TAYLOR: That is not out how this is working. This is a really important point. The traditional approach to a carbon tax or an emissions trading scheme is to impose penalties. You know penalise the activities you don't like. This is a very different approach. This is an incentive driven approach.  Companies, households, incentives to get on and deliver those technologies that can bring down emissions, can offset emissions. And incentive based approach means you're not raising the cost of energy. You're not penalising. 

KIERAN GILBERT: It still becomes a trading scheme though, doesn't it? 

ANGUS TAYLOR: Well, you know a traditional trading scheme penalises. That's the point and that's not what we're going to do, and that's not what we are doing, Kieran. Our approach is to incentivise. That way you don't impose costs on the economy. You don't destroy jobs.  You don't destroy industries the way penalties, which have been imposed in the past, have done. We saw when Labor put their carbon tax in place we saw manufacturing jobs shed across Australia. It's only now we're getting back to the point where more than a million Australians are working in manufacturing. That's what we want to see, but we're not going to go through that process again of penalising our traditional industries.  

KIERAN GILBERT: On the $20 billion of government investment a big chunk of that's being undertaken by the Australian Renewable Energy Agency and Clean Energy Finance Corporation.  I tell you what, in hindsight, we're lucky, and you're lucky, the coalition wasn't successful in scrapping those two entities. 

ANGUS TAYLOR: Well, I mean I've embraced the work that the CEFC and ARENA is doing and I've focused them much more broadly, and this has been a fight we have had with Labor. I want them focused on every source of emissions across the economy. Labor just wants them focused on the 30 per cent in the electricity grid, and that's absolutely the wrong approach. I want a much broader approach so they can get involved in supporting farmers with improving their soils and absorbing more carbon in their soils. 

KIERAN GILBERT: That was Angus Taylor speaking.