NATIONAL AFFAIRS: by Peter WestmoreNews Weekly
Why Rudd's emissions trading scheme should be defeated
, June 13, 2009
As unemployment soars, the handicaps that an ETS would impose on the Australian economy are the last thing we need, writes Peter Westmore.Kevin Rudd's promised emission trading scheme - with the Orwellian-sounding title of the Carbon Pollution Reduction Scheme (CPRS) - is facing more or less inevitable defeat in the Senate.
The name of the scheme is a misnomer, as it is designed to deal with Carbon Dioxide (CO2) emissions, not emissions of carbon, which are an entirely separate problem not dealt with by the legislation.
The Prime Minister put forward the scheme before the 2007 elections, and is committed to proceeding with it to polish up his environmental credentials with voters. However, the legislation before parliament now is a watered-down version of what he promised before the election.
At that time, he announced that Australia's legislation would be introduced in 2010, and would apply across the board to all industries. Mr Rudd promised that Australia's CO2 emissions would fall by 60 per cent between 2000 and 2050.Few exemptions
After the last election, he appointed ANU research economist Ross Garnaut to conduct an inquiry into an emissions trading scheme (ETS). Predictably, Professor Garnaut endorsed an ETS and, in July 2008, recommended mandatory emission targets with few if any exemptions.
In December last year, the Rudd Government released its white paper which proposed a mandatory 5 per cent cut in CO2 emissions by 2020, with a 15 per cent cut by 2020 if an international agreement on mandatory targets was reached at the Copenhagen Climate Change Conference in December 2009. The plan would be implemented by a cap-and-trade system, rather than a direct carbon tax.
The plan also offered compensation for Australian industries which operate in export markets or face competition from overseas companies not subject to such costs, and excluded agriculture and most firms from its operations.
However, when legislation was finally introduced in May 2009, it was further weakened to include a July 2011 start date for the CPRS, a $10 per tonne charge for carbon permits for the first year, and a target of 25 per cent reduction of CO2 levels by 2020 only if the Copenhagen Conference agreed to ambitious mandatory targets to stabilise levels of CO2 equivalent in the atmosphere at 450 parts per million or less by 2050.
Nevertheless, the overall effect will be to impose substantially higher costs on consumers, mining and energy companies, transport and aviation industries, and energy users, including electricity companies.
If the devil is in the detail of the legislation, the Government's plan is fiendishly complex. It embodies 10 separate bills introduced into federal parliament on May 14.
The legislation is now bogged down in party politics. It is generally accepted that the Government modified its earlier plan due to two factors: the global financial crisis which has already pushed unemployment rapidly higher, and the political need to get its legislation through the Senate where it needs the support of Opposition senators.
The general view was that the Government had amended its original target to try to jam the Liberal Party, which, both in government and opposition, has supported an emissions trading scheme.
However, the position of Opposition and independent senators is already clear from the Senate select committee which recently inquired into the Carbon Pollution Reduction Scheme.
Their report made 18 recommendations which rejected the Government's scheme, proposing that "the government reconsider its proposed approach to how Australia can best contribute to a reduction in global greenhouse gas emissions", to which Australia's own contribution is just over 1 per cent.
It expressed doubt about the validity of Treasury modelling which suggested that the emissions trading scheme would have a minimal impact on Australian business, and recommended that the Government remove restrictions on the mining, export and use of uranium as a fuel for the power industry in Australia.
Subsequently, the Liberal leader, Malcolm Turnbull, declared that his party would move to delay the legislation until after the Copenhagen meeting, as Australia should not legislate because its outcome is most uncertain.
One paradox is that the Greens are totally opposed to the legislation. Their position is based on nothing more than political opportunism.
While their stated position is that the government has not gone far enough, the fact is that defeat of the legislation could provide a trigger for a double dissolution, and the Greens stand to win more Senate seats in a double dissolution election.The Australian
's Paul Kelly commented, "The biggest winners from a double dissolution may be the Greens. Now sitting with five senators, a double dissolution would surely give the Greens a senator in each state (with a quota of only 7.7 per cent being required) and probably two in Tasmania, making a total of seven."
Kevin Rudd, a consummate politician, is daring the Liberals to give him the opportunity to call a double dissolution. Paradoxically, it seems everyone will be happy with the legislation's defeat.- Peter Westmore