Friday 19/1/2007 Page: 1
Cameron England Chief Business Reporter
ADELAIDE-BASED energy giant Santos is pushing for a national greenhouse gas emissions trading scheme, warning that the significant impact of climate change is now "widely recognised". Pitting itself against Federal Government policy, the $5.8 billion company wants a cost to be assigned to greenhouse gas production and energy producers to be allowed to trade emissions permits.
Santos managing director John Ellice-Flint. a confidant of Prime Minister John Howard and Finance Minister Nick Minchin, has warned governments must show leadership on climate change because "there is no time to waste".
In its recent submission to the state and territory-led National Emissions Trading Taskforce, Santos says: "A well-designed scheme will be a key component of a portfolio of initiatives to reduce Australia's greenhouse gas emissions".
Santos says an emissions trading scheme, as proposed by the taskforce,"is a reflection of the inexorable global trend towards placing a price on greenhouse gas emissions".
"Increasing human-induced greenhouse gas emissions are now widely recognised as a significant contributor to climate change," the Santos submission says.
"In providing an explicit price signal on greenhouse gas emissions, the scheme will provide greater certainty in investment decision-making and will promote further deployment of low-emission technologies." Mr Howard, who has resisted a national emissions trading regimen and refused to ratify the Kyoto Protocol on climate change, has softened his stance, setting up a business-heavy taskforce to examine an emissions trading system.
His government, however, has expressed its opposition to a trading scheme, arguing it would make Australia less competitive.
Santos, Australia's largest natural gas supplier, says a Federal Government-administered trading scheme would give long-term investment certainty to energy companies. It believes gas is the ideal "transition fuel" as the world moves from highly polluting coal to more environmentally friendly energy production.
Santos' latest annual report links global warming to Hurricane Katrina, which ravaged the U.S. in 2005, and warns "there are severe business and social consequences that flow from these climatic events". In that report, Mr Ellice-Flint writes: "We have to stop the scattergun approach to conservation and emission research and, in the medium term, pool our scarce resources." Santos also advocates strong penalties to ensure compliance with any emissions trading scheme.
The taskforce was set up by state and territory governments in 2004 to develop an emissions trading scheme to be in place as soon as 2010. Presently, there are inconsistent emissions trading schemes and renewable energy targets nationwide. In South Australia, Premier Mike Rann has set a target of reducing greenhouse gas emissions to 60 per cent of 1990 levels by 2050.
This compares with projections released by the Federal Government in December that emissions will reach 109 per cent of 1990 levels by 2008-2012. In its submission to the taskforce, Business SA agrees any scheme had to be nationally administered.
"It is inevitable that Australia will move to a carbon restrained economy in an attempt to keep greenhouse gas levels contained," Business SA says. "The absence of a national planning framework, until now, has inhibited companies taking greater responsibility to implement sustainable business practices."
How Does Emissions Trading Work?
- Emissions trading systems work by making it expensive to produce greenhouse gases
- Under the proposed scheme, which would initially cover stationary energy producers such as power plants, companies would be given a free allocation of "permits" to produce greenhouse gases
- There would be financial penalties for each tonne of greenhouse gases produced above this level, at a cost of perhaps around $30 per tonne by 2030
- Companies could avoid this however by buying unused permits from other producers, or offset their greenhouse gas production by measures such as planting trees or pumping greenhouse gases underground
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