15-December-2008
Portfolio Media Releases, The Economy, Emissions Trading Scheme
The Coalition will make a considered evaluation of the Government’s proposed emissions trading scheme released today.
This is one of the biggest structural changes in a generation to our economy.
We will not be rushed into endorsing, opposing or suggesting amendments to this proposal.
The Coalition and business found with the Government’s Green Paper on emissions trading that the devil was in the detail.
As the flood of criticism demonstrated, the Green Paper model was found to be deeply flawed.
As well, huge uncertainty is created by the Government’s inexplicable refusal to model the implications for Australian jobs and businesses of Australia establishing an ETS where the world fails to reach a global agreement.
The Government has also failed to take into account the implications of the global financial crisis in the context of this ETS.
As a consequence, very little is known or understood about the transition costs to an emissions trading scheme over the next 10 to 15 years.
That is why we have commissioned an independent economic analysis of the White Paper.
The analysis will be conducted by the Centre for International Economics, led by its Chairman and Executive Director Mr David Pearce, an accomplished economist who has already undertaken a large amount of work on climate change issues, including emissions trading.
Mr Pearce’s report, due in February, will significantly inform our response. The terms of reference are attached.
It is important always to bear in mind that an emissions trading scheme is not a goal in itself. It is no more than one of several policy measures used to reduce emissions.
The design of an ETS therefore has to be assessed clinically in terms of its cost-effectiveness both with regard to reducing emissions and above all in terms of its impacts on economic growth and jobs.
If Government gets this wrong, it will simply mean exporting jobs and emissions offshore while doing nothing to save the Murray-Darling Basin or the Great Barrier Reef.
The Coalition, in evaluating the White Paper and other practical proposals, starts from the following position on a number of key factors.
1) Climate change is best tackled from a position of economic strength.
2) The impact of the global financial crisis on the real economy and jobs must be taken into account when assessing the ability of Australian industry to introduce an emissions trading scheme in 2010.
3) Australia must work in concert with the rest of the world (there is no Australian solution to climate change, there is only a global solution).
4) Any emissions trading scheme must not result in the export of emissions and jobs.
5) Excessive haste carries great risk (to the resilience of our economy).
The terms of reference for the White Paper analysis can be found here: http://www.liberal.org.au/_docs/ToR_WhitePaperAnalysis.pdf
Media contact: Stuart Eaton, 0433 298 620.