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ETS: backflip « Previous | |Next »
May 5, 2009

The emissions trading scheme has been delayed for a year. The global recession is the reason for the delay. Fair enough. But wait there is more. Labor will soften the beginning of the scheme with a low, fixed carbon price and a "global recession buffer" of aid for affected industries. They are looking more like the Liberals everyday as the changes are along the lines of what business and the Liberals had been urging. The reason? The global recession.


In the revised package, which the Rudd Government says strengthens the carbon pollution reduction scheme, will:

- Raise free permits to polluting industry from 90 and 60 per cent to 95 and 70 per cent in the first five years of the scheme.

- Fix the price of carbon per tonne to $10 for the first year and offer unlimited permits for that period.

- Provide $200 million to business for building efficiency programs in the next financial year.

There was a move away from brownness and defending the interest of the coal industry, as well as those businesses that will have to pay millions for carbon permits but do not pollute enough to qualify for free permit.

The strengthening spin refers to the heavily qualified pledge of a cut of 25 per cent of emissions on 2000 levels in the unlikely event the December Copenhagen Climate conference endorses an ambitious international agreement. Otherwise it’s the same deal as before: 5% if there’s no agreement, 15% if there’s an international deal short of the 25% cut plus conditions.

What can you say to this? That a mere something is better than nothing? Some sections of big business say that it is a step in the right direction but that it needs even more tweaking. The Liberals, Nationals and Minerals Council say that a fundamental redesign of the ETS is needed; ie., it needs to be hollowed out completely. But they hasten to add, they are all for environmental sustainability it is just that......

| Posted by Gary Sauer-Thompson at 7:57 AM | | Comments (14)


I am surprised that three environment groups--- the Australian Conservation Foundation, WWF and the Climate Institute---supported the Rudd Government's backflip saying it was important the amended package was passed by Parliament.

Will it? Rudd + Co have turned away from the Greens and the cross bench Senators. The Liberals are basically demanding extra changes.

For the Coalition it is slow and soft until the rest of the world is on board. All business should have 100% protection from the ETS. Anything else will destroy millions of jobs and regional communities.

The right pathway is that advocated by the NFF and the Minerals Council, both of whom are climate change sceptics.

I am too. The state and federal governments are not serious ---look at this story.

Brisbane environmental lawyer Jo Bragg and her partner, Gary Kane, spent $28,000 on three roof panels to generate solar power for their home in the inner Brisbane suburb of Highgate Hill. After receiving a federal government rebate of $8000, they hoped to recover their investment in a cleaner planet within a few years by selling excess power into the mains electricity grid. In the three months to April, they used 1384 kilowatt hours and produced 388 kilowatt hours of excess power, for which they received the princely sum of $12.96 after taxes

It's a joke. They should be paid for the 1384 kilowatt hours of energy produced.

As Bernard Keane points out in todays Crikey

It has also given up entirely on the idea that our biggest polluters should contribute to the task of reducing emissions. Between 94.5% of free permits, and exemption from the Renewable Energy Target handed out last week, big polluters will not be required to make any effort to operate more efficiently or move to lower-emissions technology. During the first, carbon tax stage of the scheme, the biggest polluters will only pay an initial carbon price of 55 cents per tonne.

So much for trying to make the shift to a low carbon economy. This represents a surrender by the Government to the polluters and to the Coalition, which has criticised the scheme for its impact on business, its failure to recognise the global recession, its low targets and for starting too soon.

The conditionally of the pledge to cut emissions by 25% on 2000 levels means that Australia will only move to a 25% target if the following conditions are met:

Comprehensive global action capable of stabilising CO 2-e concentrations at 450ppm CO2-e or lower. This requires a clear pathway to achieving an early global peak in total emissions, with major developing economies slowing the growth and then reducing their emissions, advanced economies taking on reductions and commitments comparable to Australia, and access to the full range of international abatement opportunities through a broad and functioning international market in carbon credits.

This would involve:

* comprehensive coverage of gases, sources and sectors, with inclusion of forests (REDD) and the land sector (including soil carbon initiatives (e.g. bio char) if scientifically demonstrated) in the agreement;
* clear global trajectory, where the sum of all economies' commitments is consistent with 450ppm CO2-e or lower, and with a nominated early deadline year for peak global emissions not later than 2020;
* advanced economy reductions, in aggregate, of at least 25% below 1990 levels by 2020;
* major developing economy commitments to slow growth and to then reduce their absolute level of emissions over time, with a collective reduction of at least 20% below business-as-usual by 2020 and a nomination of a peaking year for individual major developing economies;
* global action which mobilises greater financial resources, including from major developing economies, and results in fully functional global carbon markets.

If these are not met then its 5% if there’s no agreement, 15% if there’s an international deal short of the stuff above.

so Australia goes to the Copenhagen conference in December arguing for a 5% commitment. This is where we have got after 15 years to make inroads into this problem

And some want to argue that that the shift to low carbon economy is taking place!

It looks very much like nothing at all is going to happen, since Turnbull won't not support it no way, no how.

Rudd has failed to turn words into actions again.

In the Australian Financial Review today, Greig Gailey, president of the Business Council of Australia has an op-ed piece supporting the revised Rudd scheme and makes the important point that, “If investors judge that the CPRS is going to be materially altered if and when government changes hands, they will probably defer or abandon their investment plans”.

It is true that there are many in the Coalition who just want the ETS scheme killed off. Turnbull is not one of them. Under the de facto leadership of the agrarian populist Barnaby Joyce, the Nationals reject the carbon reduction scheme outright.The Climate change sceptics in the Liberal Party are led by Nick Minchin.

the Australian Conservation Foundation and the Climate Institute are close to being clones of the ALP. You can trust the ALP to do the right thing on the environment.

I would take issue with the trust bit.

Is it the case that Australia's contribution to reducing global emissions will be determined by whatever international agreement is reached (or not reached) at Copenhagen? If so, with all the big countries at the table, then Australia would have little scope to say what we will or won't accept.

Rudd wouldn't refuse to ratify the protocol, would he?

Alan Moran from the Institute of Public Affairs has called for the ETS to be abandoned in The Australian. He says

Formally announcing a total abandonment of the carbon trading scheme must be the next step. Such action is necessary, and the sooner the better as the prospect of the proposed tax hangs like a sword of Damocles over any prospective investment decisions involving energy. Australia can never afford to carry such baggage and the global financial crisis merely brings this home.

What must be defended at all costs is Australia's energy-intensive industry structure, a coal-based electricity generation industry and coal and gas being our export mainstays.

Moran's from the IPA? At that rate, it must be perfectly reasonable to bracket out investment in renewable energy when you're talking energy. More than just reasonable, it must be rational, evidence-based and pragmatic.