Rudd delays, amends emissions scheme

Adelaide Advertiser
Tuesday 5/5/2009 Page: 1

PRIME Minister Kevin Rudd has bowed to intense pressure, amending and delaying the full introduction of his unpopular carbon pollution reduction scheme and allowing householders to join in. The changes to the scheme include stronger medium-term targets aimed at garnering previously absent green support and extra assistance for business to protect jobs.

"The Government has ... been listening to households and the contributions which they wish to make voluntarily to this carbon pollution reduction scheme, " Mr Rudd said yesterday. Opposition Leader Malcolm Turnbull instantly labelled the announcement as a "humiliating backdown" but Mr Rudd insisted it was the right decision.

"This is serious stuff for the nation," Mr Rudd said. "It is fundamentally important we get it right in terms of dealing with the recession impact on businesses now, holding out a real prospect for our negotiators acting internationally to get a strong outcome in Copenhagen at the end of the year. "(It's about) getting that balance right as well as reflecting our attentiveness to what households are saying about their desire to contribute voluntarily as well."

Concerned householders will be able to calculate their carbon output and buy permits to pollute, effectively taking these permits out of circulation. Because the scheme will have a set number of permits for trading, permits bought in this way will not be available to polluting industries, thus reducing the amount of pollution able to be pumped into the atmosphere.

These permits will be bought by a new Australian Carbon Trust - Energy Efficiency Savings Pledge Fund, which will pool donations to buy the permits. Another division of the Australian Carbon Trust will use $50 million in Commonwealth seed funding to finance energy-efficiency measures in businesses upfront, with these funds paid back by the business according to the cost savings they generate.

The decision to delay the introduction of the CPRS is a major backdown reflecting the reality that the scheme has to date attracted few enthusiasts outside the Government and was headed for certain defeat in the Senate where the Opposition and independents were lining up to vote it down. Stronger emissions reduction targets have been included to woo the green lobby and environmentally conscious voters after the previous targets were widely ridiculed as inadequate.

Under the revised plan, the proposed range of cuts moves from a minimum 5% of 2000 levels with a maximum of 15% , to a maximum of 25% subject to international agreement at the UN climate change conference in Copenhagen later this year. Mr Rudd said the 25% global cut would be sufficient to save the Great Barrier Reef - an admission the previous, more modest targets would doom the natural wonder to destruction from global warming.

But the beleaguered scheme still faces a rocky future in the Senate because the Opposition intends to vote against it, describing the moves as "policy on the run" and mere "tinkering at the edges". Independent Senator Nick Xenophon agreed, calling the changes "window dressing" on a fundamentally flawed scheme. Greens leader Bob Brown said the outcome could "hardly be more disappointing". Mr Rudd described the delayed commencement as appropriate for business in the context of the global recession but claimed solid support from key business groups because the new scheme would provide business with much-needed investment certainty.

Aware of the internal difficulties confronting Mr Turnbull, whose party room is divided on the need for an emissions trading scheme, Mr Rudd called on the real Mr Turnbull to come forward. "The Liberal Leader has stated that these goals are shared by the Liberal Party in terms of action on climate change," he said. "Goals shared in relation to a slower start, goals also shared, I note, from earlier comments, for the need for more ambitious targets overall."

But Mr Turnbull said the Government should now use the extra time gained from delaying the scheme to get its policy right. "Now that he's said that his scheme needn't start until 2011, there is absolutely no need for the legislation to be rushed through Parliament in the next five or six weeks."

Among the proposed changes is softer start-up conditions for business. Industries most affected by the new price on carbon will get additional compensation to assist in meeting the costs of transitioning to the new scheme and the carbon price itself will be pegged at an extraordinarily low $10 a tonne for the first year of operation.

This date of operation has been delayed from July 1, 2010, to July 1, 2011, but will not be fully operational until July 2012. It is understood the process to change fundamental aspects of the CPRS began a fortnight ago during a secret meeting in Mr Rudd's office involving Climate Change Minister Penny Wong, parliamentary secretary for climate change Greg Combet and senior advisers.