04-May-2009
Portfolio Media Releases, Emissions Trading Scheme
The Rudd Government’s backdown on its proposed Emissions Trading Scheme means that Australia now has time to get this critical area of economic and environmental policy right.
While the Government has proposed introducing a temporary fixed carbon price from July 2011, the ETS as originally envisaged will now not commence operation until July 2012.
This means there is now time to get design of the ETS right and answer many crucial questions left unexplained by the so-called Carbon Pollution Reduction Scheme – in particular its near-term impact on jobs, investment and Australia’s regions.
Introduction of an ETS represents the largest policy-driven change to the Australian economy in history, a fact only belatedly acknowledged by the Prime Minister.
Yet the changes proposed today by Mr Rudd and Senator Wong make their already-complex scheme even more complicated and fail to address several of the key objections levelled by business and community groups:
• There is still no forecast of the near-term impact of the ETS on jobs and economic growth.
• Australia’s trade-exposed industries are still placed at a disadvantage to their competitors, even though the disadvantage is less severe than in the original scheme.
• There is still no assurance that overall emissions would be reduced by investment in complementary abatement measures such energy efficiency. The energy efficiency measures that the Government has proposed are largely tokenism.
• There is still no scope for abating Australia’s overall emissions by offsetting or crediting biochar, better land management and other green carbon measures advocated by the Coalition.
• Australia’s largest export earner, the coal industry, is still treated anomalously.
In short, Mr Rudd and Senator Wong have tinkered with a deeply flawed proposal that still looks likely to damage the economy, yet has not so far been demonstrated to be the most cost-efficient or effective way to reduce carbon emissions.
Rather than attempting to push the increasingly complex and compromised existing ETS through the Senate in pursuit of political goals, they should refer its design to the Productivity Commission to assess whether it meets the nation’s economic and environmental objectives.
“For months the Coalition has raised concerns about the Government’s flawed proposals,” said Andrew Robb, Opposition spokesman on Emissions Trading Design. “Today’s announcement does little to address our fundamental concerns. Australian export and import competing businesses will still pay a hefty tax that our competitors won’t pay.”
“There is still no analysis of the effects of this policy on jobs, regions and industries,” said Opposition Leader Malcolm Turnbull. “There is scant recognition of complementary measures and no evidence this is the best way to reduce emissions. While the Government has delayed the start date, that’s less important than getting the details right so we don’t send jobs and industries offshore.”
Media contact: Stuart Eaton, 0433 298 620