BCA backs emissions trade scheme

Australian
Wednesday 4/4/2007 Page: 25

AUSTRALIA'S blue chip business sector has backed the development of a comprehensive global greenhouse gas emissions trading scheme, with long-term fixed targets the cornerstone of domestic policy response to the threat of climate change. The Business Council of Australia's formal endorsement of emission trading follows six months of negotiations among its membership, which includes BHP, Rio Tinto, Alcoa and Exxon Mobil Australia.

BCA chairman Michael Chaney said a national emissions trading scheme would need to be integrated into international markets, while other strategies, including research and development of new energy technologies and energy efficiency, would also have a role to play. But the strategy fell short of formally proposing a low-emissions energy policy for Australia, focusing on setting a longterm emissions target and price curve to pull these technologies through.

The strategy is unambiguous on the importance of sustaining strong growth in the domestic and global economy as part of the solution to addressing climate change, and adamant that big emitting sectors such as metals processing and resources remain part of the domestic economy. It will be the strength of the Australian economy in the future not its diminution which will ensure Australia is able to address the potential risks associated with climate change," the BCA paper says.

Some have argued for an immediate start to phasing-out those sectors of the Australian economy which contribute most to emissions, without any apparent regard to how the livelihoods and lifestyles of all Australians are directly and indirectly linked to our current high-emission domestic and global economy." The BCA said managing the risk of climate change required a flexible policy response able to respond to the development of scientific understanding of the risk of climate change, as well as developments in energy technology.

Specifically, it proposes the use of a cap and trade scheme to meet both immediate and long-term global emission reduction targets, which can be differentiated by each country with international trading of emissions permits and credits as required. It proposes that the trading include all emissions beyond just stationary energy, including transport, deforestation, waste and industrial emissions.

The position paper will form part of the BCA's submissions to the Prime Minister's Task Group review of emissions trading in Australia, due to report at the end of May. BCA policy director Maria Tarrant said planning for such a scheme could begin now with an initial low level of targets and trading starting in a few years.

We would expect it is possible to consider development of a scheme in the short term and that you could be looking to introduce the scheme and get the systems ready sooner rather than later," Ms Tarrant said. "A framework that includes emissions trading will assist in bringing forward a range of different energy technologies over time, because you will have a forward price curve." Wind Energy chief executive Dominique La Fontaine said the renewable industry would be encouraged by the comprehensive review, but said just as important was a focus on strategies to accelerate deployment of zero and low emissions energy technologies.

"Getting emissions trading is crucial, but it's just as important to ensure you've got an organised approach to delivering the new wave of energy sources at the lowest possible cost, which a properly structured industry development policy will do," Ms La Fontaine said.