Senate raises the bar for Rudd's ETS

Summaries - Australian Financial Review
Tuesday 17/3/2009 Page: 8

The Rudd government may have to make radical changes to its emissions trading scheme (ETS) legislation to win Senate support, while a major power generator warned a delay to the start of the scheme may stall new investment in the sector. TRUEnergy managing director Richard McIndoe said the government's proposed scheme came with large risks, including threatening secure electricity supplies.

Opposition Leader Malcolm Turnbull confirmed on the weekend his party would reject the government's emissions trading design, putting the future of the scheme into doubt. Mr Turnbull said the scheme should be delayed to 2012 and that emission intensive, trade-exposed (EITE) companies should receive 100% of their permits for free.

Senator Nick Xenophon, who could help the government secure passage of the legislation, said the government needs to overhaul the scheme by dropping absolute emissions caps and adopting emissions intensity targets. Mr Turnbull seized on claims by coal mining giant Xstrata that the ETS would put four of its coal mines and 4000 jobs at risk.