SINCE Kevin Rudd became Prime Minister of Australia we have signed Kyoto and there has been a commitment to an Emissions Trading Scheme – what his government calls a Carbon Pollution Reduction Scheme.
It was to start next year, but according to a surprise announcement yesterday, the scheme has been delayed a year.
In announcing the delay the Prime Minister described it all as “hard” and “difficult” and “complex” policy made harder, more difficult and more complex as a consequence of the global financial crisis.
I am not sure the financial crisis makes this obviously complex financial intervention any more complex – but certainly less politically palatable.
When well known geologist and climate skeptic, Bob Carter, reported on his presentation to a parliamentary committee considering the proposed legislation just two weeks ago he wrote:
“The committee mostly needs help with fashioning politically feasible solutions to the incredible mess that they now find themselves in.”
Yesterday’s announcement that the scheme will now be delayed, and significantly changed with a fixed price period and an increasing in the target for emissions reduction to 25 percent by 2020, suggests the government is grappling with the issue of what Professor Carter described as fashioning feasible solutions.
According to Shane McLeod writing for ABC Online the changes are all about politics and appealing to key interest groups:
“Senior figures within the minor parties have been puzzling over the Government’s tactics – just a matter of days ago they said they had not had any serious approaches from the Government about negotiating the legislation’s passage through the Senate.
“Now they know why.
“The Prime Minister says the changes are needed to reflect economic reality. But they also seem an attempt to tailor solutions for a range of key interest groups.
“The big winner is industry: it gets the “soft” start: unlimited carbon permits will be sold in the first year of the scheme, at the bargain price of $10 per tonne.
“There’s more compensation for so-called Emissions-Intensive, Trade-Exposed industries (EITE). And, of course, it’s starting a year later than had been planned.
“For environmentalists, the magic number of 25 has been introduced as the potential “strong” finish: this is now the upper limit on the emissions cuts the Government is prepared to consider implementing by 2020 – if the rest of the world adopts a more dramatic cut to carbon emissions (to target an atmospheric carbon level of 450 parts per million).
“For everyday citizens there is a new Australian Carbon Trust. Its job will be to help people who want to make a contribution to reducing emissions.
“Under the existing cap-and-trade design, their efforts in saving energy would actually leave more space for big polluters to spend less on carbon permits.
“The idea of the trust is to allow them to contribute financially and have carbon permits permanently retired (which would, in theory, increase the price of the more scarce remaining permits).
“The one-year delay also gives the Government some leeway: it means its trading scheme can now reflect the outcome of this year’s Copenhagen talks in its final targets (rather than leaving the number uncertain until then) and gives it a bigger upper limit that it can impose (perhaps reflecting the fact that other major emitters – especially the US – are proposing big numbers).”
Matthew Franklin writing in The Australian quotes the response from key interest groups:
“The Greens rejected the Government’s new plan, saying it would give $2.2billion in assistance to big polluters.
“If you add a little bit of green to brown, you still get brown,” said Greens deputy leader Christine Milne.
“By delaying the start of the scheme and capping the carbon price at $10 a tonne for the next year, the Government has ensured that there will be essentially no climate action in Australia until July 2012 at the earliest.”
“The Southern Cross Climate Change Coalition, which includes unions, the Climate Institute and environment groups, said lifting the emissions reduction target to 25 per cent would boost international efforts for an agreement on reducing emissions worldwide.
“This internationally-credible target, coming after COAG (the Council of Australian Governments) cleared the way for renewable energy legislation and further steps on energy efficiency, means the CPRS should be supported so business can get on with investing in the clean energy and other low-carbon jobs that other competitor countries are investing in,” the coalition said.
“Business Council of Australia president Greig Gailey supported the revamped scheme.
“Given Australia’s current economic circumstances, the BCA welcomes and supports the Government’s responsible decision to delay the commencement of the CPRS by one year to July 1, 2011, to provide business with more time to prepare for the scheme and to alleviate some of the pressures confronting Australian business as a result of the global financial crisis,” he said. [end of quote from Mr Franklin’s article]
However the Rudd government chooses to dress-up or down this policy let’s not forget this financial intervention will not change global temperatures, it will have no impact on the claimed climate crisis. Furthermore it is hard, difficult and complex policy (to quote the Prime Minister) for purely symbolic purposes.
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