Tough action urged on climate change

Courier Mail
Saturday 28/3/2009 Page: 75

SUPERANNUATION funds and other key investors have backed the Federal Government's planned 2010 emissions trading scheme but want it to consider taking tougher action to tackle climate change. The Investor Group on Climate Change is a collaboration of investors managing $500 billion in funds. IGCC members include AMP Capital Investors, Colonial First State, Vision Super, Merrill Lynch, Suncorp Investment Management and Catholic Super.

They say they want strong action to halt climate change because its impacts risk hurting future investment returns. IGCC chairman Frank Pegan told a Senate inquiry yesterday that the Government's planned emissions trading scheme should be introduced as soon as possible and he criticised "self-interested" companies creating scare campaigns and urging delays.

The IGCC members are part owners of many of Australia's largest companies, some of whom are arguing against the emissions trading scheme's introduction and are warning of deep job losses as a result of the scheme's introduction of a per tonne cost for greenhouse gas emissions. The scheme is aimed at driving the biggest emitters energy generators and large manufacturing and industrial companies to slash their emissions, while encouraging newer, low emission energy sources and production processes.

Mr Pegan said IGCC members were part-owners of many of these big emitters, some of whom he said were "arguing narrow self-interest over the longer-term economic and environmental prosperity" of Australia. He said the IGCC "does not support the views of these companies that the (scheme) will be damaging to the Australian economy and to Australian jobs in the longer term".

"We believe that the costs of the scheme to the Australian economy are manageable and rather. that the costs to the economy and society from further delay to the introduction of the CPRS, will be significant." IGCC spokesman Steve Gibbs said the scheme was central for getting investment in cleaner technologies and industries.

He said the IGCC wanted the Government to keep open the option of adopting tougher emission reduction cuts if talks this year achieved a global agreement on strong action on climate change. The Government says it could cut emissions by 15% in this event, but the IGCC says it should hold open cuts of 20-25% .

In December a group of senior Australian economists. including ANZ chief economist Saul Eslake, Citi's Paul Brennan and nabCapital chief economist Stephen Halmarick, said a well designed emissions trading scheme was better than a carbon tax to achieve a low-carbon economy with minimal restraint on economic growth. But they said that the design of the current scheme was flawed in giving shelter to carbon polluters.

The economists warned that excluding or giving special concessions "to particular polluters would come at a very real cost to the community in terms of lost incentives and opportunities to develop new technologies and alternative products".