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Tuesday 19/10/2010 Page: 5
AUSTRALIA lags far behind China and Europe in forcing industry to pay for its greenhouse gas emissions, according to research that will bolster the case for a carbon price.
A comparison of international climate policies found Australia is doing less than most of its major trading parties including the US and Japan to encourage a shift to a cleaner energy supply. Commissioned by the Climate Institute Australia, the study challenges claims from the federal opposition and some business groups that Australia will damage the economy if it introduces a carbon price via a tax or emissions trading scheme.
Australia's climate policies, such as the national renewable energy target, were found to be equivalent to forcing the power industry to pay $US1.70 ($A1.71) per tonne of CO2. By contrast, China has an underlying carbon price on its power sector of $US14.20 eight times higher. China's policies include the forced shutdown of its worst-performing coal-fired power stations, and the world's largest renewable energy program $US35 billion invested last year, compared with $US18 billion in the US. It is considering a carbon trading scheme.
Britain ($US29.30 a tonne), the US ($US5.10) and Japan (SU53.10) were each found to be ahead of Australia in encouraging a shift to cleaner power. Climate Institute Australia deputy chief executive Erwin Jackson said the world-first research showed companies in Asia and Europe were making a strategic decision to move ahead to reap the benefits of creating new jobs and industries in clean energy.
The report by British consultant Vivid Economics backs studies that have found a direct carbon price through a trading scheme or tax is the cheapest way to reduce emissions, and warns that Australia risks losing competitiveness if it is late in embracing clean technology. Economist and government adviser Ross Garnaut recently said convincing Australians how much other countries particularly China were doing to tackle climate change was one of the most important challenges facing the government.
"I am frankly shocked at how persistent the ignorance in Australia is of that", Professor Garnaut said. "It is as if a lead veil had been inserted around the brains of most Australians and made them impervious to information that is not secret, about what is going on in other countries". The Vivid analysis found Britain's high implied carbon price was due to the European emissions trading scheme, the British tax on fossil fuel power generation and its renewable energy target. In the US, the implied carbon price has been driven mainly by tax credits to encourage investment in renewable energy. The US Senate has rejected emissions trading.
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