Electricity system among the worst polluters in the world

Sydney Morning Herald
Friday 5/9/2008 Page: 7

DESPITE having one of the world's most advanced economies, Australia has an electricity system that is one of the worst greenhouse gas polluters. The performance of only a handful of countries, including Cuba, Botswana, Kazakhstan, Libya, Malta and Bahrain, rates more dismally. The extraordinary finding was made by Ross Garnaut, the Government's independent adviser on climate change, in his last report. Today he will deliver his long-awaited advice on how much Australia should aim to cut greenhouse gas emissions by 2020.

Professor Garnaut's latest report is expected to supercharge the lobbying by the nation's top mining, energy and industry groups, who argue that any plans by the Government to make deep cuts to emissions by 2020 will damage the economy and create the potential for power shortages The Climate Change Minister, Penny Wong, has distanced the Government from Professor Garnaut, but yesterday she would not be drawn on its preferred 2020 target until she had further advice from Treasury. "We are going to have to wait and see what Professor Garnaut comes out with and we will put our Treasury modelling out in October," she told the Herald .

But Senator Wong is warning business that Australia must set a credible target to cut greenhouse gas emissions, as the Government prepares to respond to the first formal advice from Professor Garnaut on how deep those cuts should be. Senator Wong said Australia would lose its influence in the vital United Nations negotiations on climate change if it did not set a credible target on emissions. "If we are going to get the global action we need, we will have to act at home. We cannot expect to influence the shape of a new international agreement if we cannot demonstrate that we are also taking responsibility here," she said.

But Australia's most powerful business leaders and lobbyists remain critical of the Government's plans to cut greenhouse gases. The plans were unveiled six weeks ago in the green paper on the Carbon Pollution Reduction Scheme. The head of the Australian Industry Greenhouse Network, Mike Hitchens, said it was irrelevant that Australia's electricity system ranked with the most backWard countries for its greenhouse gas emissions. "That's just a fact of history - we have a lot of coal," he said.

Australia has to negotiate its share of the international burden with an eye to what our economy looks like - one that does thrive on the development of its resources. The only reason Australia is not in recession today is because of its resources." The network represents some of the heaviest polluting companies, from the aluminium producer Alcoa to Cement Australia. The Minerals Council of Australia and the Business Council of Australia have also warned the Government it must water down its scheme, which will require big greenhouse emitters to obtain permits to pollute.

The Government promised free permits for heavy polluters, such as the aluminium producers Alcoa and Rio Tinto, who face competition from overseas. A recent report by the Business Council said several businesses would be shut if the scheme went ahead and others would have to review operations. The report had widespread media coverage even though the examples given were anonymous and a Citibank analysis found the scheme would have only a marginal impact on most companies. None of the business lobby groups will be drawn on what targets they would accept on emissions by 2020.