Emissions scheme `designed to fail'

Canberra Times
Wednesday 15/4/2009 Page: 6

The Rudd Government should "tear up" its flawed emissions trading scheme and replace it with a carbon tax administered by an independent agency, a leading economist says.

The director of the Australian National University's business college, economist Professor Warwick McKibbin told a climate forum in Canberra yesterday he believed the Government's cap-and-trade scheme was "designed to fail on purpose" as a way to defer policy action on climate change. "I think the Government's carbon pollution reduction scheme is designed on purpose not to make it through the Senate," Professor McKibbin said.

The public forum was organised by ANU researchers taking part in last month's world climate science conference in Copenhagen, to report on global developments in climate research and policy. ANU's climate change institute director Professor Will Steffen was key speaker at Copenhagen and is currently drafting policy to be negotiated at the United Nations climate change conference in Denmark later this year.

One of the key messages from the conference was the need for political leaders to "stop fiddling at the edges" with climate policy and get on with the job, Professor Steffen said. "We are well beyond thinking about making marginal changes. The science shows we are already moving beyond patterns of climate variability and facing a risk of abrupt and irreversible climate shifts."

Professor McKibbin said opinion was shifting away from "the old European style emissions trading system" because it had proved to be "not particularly useful or reliable". He warned one of the biggest challenges facing climate change policy was "continual reneging on promises by backsliding politicians".

Professor McKibbin suggested a possible solution was to take policy out of "the hands of politicians and bureaucrats, and put it in the hands of an independent agency, modelled along similar lines to the Reserve Bank, whose job is to control the carbon price and create a stable long-term carbon market".

Australia could move quickly to introduce a carbon tax to cut emissions by "tearing up about 380 pages" of the Rudd Government's emissions trading blueprint and replacing it with a hybrid system combining a carbon tax and fixed price carbon permits. "We don't need to go back to the drawing board. We can go from the [carbon pollution reduction scheme] to the equivalent of a carbon tax just by changing five characteristics of the existing system."

These included creating a carbon market with clear, long-term property rights that would operate beyond the control "of vested political interests" by allowing everyone to trade carbon assets. "You want people to be able to make money out of reducing greenhouse emissions, but the systems that make it possible to do this must be designed to be very transparent ...