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ETS: negotiations « Previous | |Next »
March 11, 2009

The Rudd Government’s ETS legislation came out yesterday. It sticks close to the compromises of their White Paper and the Garnaut Report. This response ignored science and focused on politics---setting the emission reduction targets low in the hope of winning the support of the energy intensive trade exposed industries and the coal industry for the ETS.

MoirWongETS.jpg

Despite Treasury modelling on the low economic impact of reducing Australia’s emissions over the medium and long term, the Rudd Government rolled over from the pressure exerted by the Greenhouse mafia.

The obvious problems with the CPRS version of a cap-and-trade, as presented in this legislation, are:
(i) the proposed cap--- 5 or 15%--- for 2020 is too weak;
(ii) too many free permits are being handed to heavy polluters;
(iii) exclusion of voluntary emissions reductions beyond those represented by the national cap.

Will the Parliamentary debate and negotiations in the Senate focus on increasing the percentage reduction in Australia’s emissions by 2020 and removing the perverse subsidies to major greenhouse gas emitters? The Coalition has made its position clear--roll back the date and give the major greenhouse gas emitters 100% permits. They, in effect, become free riders.

So it depends on the Greens and the two independent Senators--Fielding and Xenophon---to help ensure that the legislation meets the target of 450 ppm CO2−e. As Treasury argued Australia’s aggregate economic costs of mitigation are small (although the costs to sectors and regions vary), whilst growth in emission-intensive sectors slows and growth in low- and negative-emission sectors accelerates.

| Posted by Gary Sauer-Thompson at 7:39 AM | | Comments (10)
Comments

Comments

I can't see the Greens passing it in its current form, but surely the ALP anticipated the Greens' response?

christine Milne said it's worse than nothing. Coal is pushing for free permits. We'll have international obligations set for us at Copenhagen. Wong isn't a good salesperson.

Is it possible Rudd was never serious about it in the first place?

Wong may be a good negotiator in the Senate process. She understands how the Senate works as a House of Review and balance of power.

Wong's pitch is that her ETS scheme is better than nothing (the Coalition's position) and that the Greens want something that is way out of reach and unaffordable. Yet her emissions trading scheme is designed in such a way that it locks out the options for deep cuts in emissions. So it actively prevents the transformation to a new, green economy.

So argue the Greens. It is hard not to agree with them.

Emissions Trading Scam

Peter,
The Greens have problems with the target, cap and permits. Without those you don't have the same ETS.

Wong may be a good negotiator, but I for one will be surprised if she manages to negotiate this through the senate in anything like it's current form.

Lyn,
it's not The Greens who are the problem for Wong. Despite The Greens saying that they will vote the ETS down than allow a flawed scheme to be come law, they will have to bend in the end to ensure that the ETS passes. They cannot be seen by their base to be the destroyers of the ETS. It must be the Coalition who is seen to wear that hat.

It is Fielding who is the problem for Wong. Fielding is much closer to the Coalition's position: all he talks about is delays and lost jobs.

Lyn asks if Rudd was ever serious, about his self-touting before the election as environmentally responsible, about a change away from short term thinking? (He's not the Messiah, he's just a VERY naughty boy)

Personally, I think the real trade balance issue to come to a head by 2020 with the introduction of tariffs based not on the individual export product, but on the per-capita carbon-equivalent emissions of the exporting country. This will suit the growing consumer markets like China and India... and put Oz in a very difficult position unless we move quickly. (It's also hard to argue against this on an equity basis)

Les,
what is missing in this debate is a recognition that by recognising that economic growth is compatible with environmental polices that are designed to reduce the carbon footprint. This can be be done by upgrading the electricity grid for renewable energy, retrofitting houses to generate and save energy, rolling out public transport networks and protecting forest carbon sinks.

At the moment all the talk from Canberra is about new investment in infrastructure for roads.

The Coalition will find itself on the sidelines watching Wong negotiate with the two independent Senators about their amendments to, and concerns about, the ETS legislation----not those of the Coalition. This is what Gillard was able to achieve over the IR legislation. The Coalition has become the defenders of Work Choices.

It means that the Coalition would have lost the capacity to steer the debate. Where will they end up--voting against the ETS legislation as a whole?

Gary,
Yes all the things you mentioned would create jobs including investment in roads.

Jobs in the bottom end of the market are very important from this point on.