Saturday, February 26, 2011

Australia to get carbon scheme by July 2012

Australia's minority Labor government has announced the country will have a carbon price by July 2012. The government has been working to reconstruct emissions trading policy after a dramatic failure under the former Labor prime minister, Kevin Rudd.

Some say the date is ambitious and leaves a multi-party parliamentary committee in a race against time to answer a list of hard questions. And the opposition has accused the prime minister of breaking a promise not impose such a tax.

MOTTRAM: Releasing a framework that sets the first of July next year as a date for setting a carbon price for Australia, Julia Gillard said now was the right time because the climate was changing as more people than ever produce more carbon than ever, but also because lingering would be bad for Australia's economy.

GILLARD: History teaches us that the countries and the economies who prosper at times of historic change are those who get in and shape and manage the change.

MOTTRAM: But a carbon price remains highly contentious in Australia. And Julia Gillard, who promised during last year's election campaign that there would not be a carbon price in this term of a Labor government, has had to work within the reality of being a minority government, courting Greens who will shortly have the balance of power in the senate, and independents who decide whether or not government measures get through parliament's lower house.

The political reality was in evidence as Ms Gillard made her announcement, flanked not only by her climate change minister, but two Greens senators and two of the lower house's four independent MPs who are part of a multi party committee that's working on how to price carbon. The Greens deputy leader, Christine Milne, made the political point.

MILNE: And it's happening because we have shared power in Australia. Majority governments would not have delivered this outcome, it is because the Greens are in balance of power working with the other parties to deliver not only the aspiration but the process to achieve it.

MOTTRAM: And with the opposition already calling it a breach of faith and an expensive one for consumers, it claims, the prime minister later conceded the point.

Politics aside, the framework sets a key goal, the July 2012 start date for a carbon price to establish an Australian market for tradeable carbon permits. It would be a two stage process. For the first three to five years, the carbon price will be fixed. Then it will shift to a flexible price, set by the market, pending a review of conditions, domestic and international, a year before that transition.

The committee says it gives business and industry what it wants now, certainty that there will be price on pollution where polluting is currently free.

But the framework is a long way from answering some key and very hard questions. Australia's climate change minister is Greg Combet.

COMBET: You will see that there has been no discussion to date of the starting price for the carbon price mechanism, or of the proposed household assistance measures that might obtain, or of the proposed measures for assisting industry for the transition to a clean energy future at this point in time. That is detailed work that of course we will have ahead of us in the weeks and months ahead. But nonetheless, the mechanism that has been outlined here is a very important step forward.

MOTTRAM: The mechanism also excludes agriculture and the status of transport is still under consideration. But one of the most contentious elements of former prime minister Kevin Rudd's failed attempt to introduce an emissions trading scheme will also likely dog this continuing negotiation - how much compensation should go to what are called emissions intensive, trade exposed industries - that is, big polluting companies like the coal fired power sector and the aluminium industry, which the Greens would want to see given as little help as possible.

Greens leader Bob Brown flagged his view.

BROWN: We are open to looking at the impact on the trade exposed industries but there is quite a deal of world experience in this now and we'll be looking at that experience because it doesn't back up some of the alarmist projections we've heard in the past.

MOTTRAM: Some of those alarmist projections included one that an emissions trading scheme would return Australians to the days of candles and horses and carts. The opposition leader, Tony Abbott, quickly flagged his continuing intense disagreement with a carbon price.

ABBOTT: We will fight this every second of every minute of every hour of every day of every week of every month. I don't believe it's going to happen because I think there will be a people's revolt - they will see this as an assault on their standard of living, which is exactly what it is.

MOTTRAM: So the government and its allies will be racing to embed a carbon trading scheme, aware that if they don't do so sooner rather than later, an election that delivered victory to Mr Abbott's side could see the scheme undone again. Ms Gillard can also anticipate a backlash from voters, if the claim that she's broken an election pledge not to have a carbon price takes hold.

Reporter: Linda Mottram, Canberra correspondent
Speakers: Julia Gillard, Australia prime minister; Christine Milne, deputy leader, Australian Greens Party; Greg Combet, Australian climate change minister; Bob Brown, leader, Australian Greens Party; Tony Abbott, Australian opposition leader


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