Coalition backs emissions trading scheme
Malcolm Turnbull has recently issued a statement of the Coalition’s support for the introduction of an emissions trading scheme.
This is probably more about avoiding an early election than a real change in the position of some views in the coalition. Bad politics aside, this is good news for moving forward on climate change.
In his statement, Turnbull set out nine issues he wants the government to address. One of his main concerns is that the scheme should provide more support to industry and should be more in line with legislation being introduced in the US (Waxman-Markey) — in fact he is calling for Australia to delay passing any legislation until Waxman-Markey has passed.
One specific amendment he asks for is that emissions intensive trade exposed industries should receive full compensation for the cost of carbon, saying:
“Emissions Intensive Trade Exposed industries (EITEs) should at least be on a level playing field with the United States and other advanced economies and should therefore receive full compensation [emphasis added] for higher energy costs until the bulk of their competitors (measured as in Waxman Markey by global market share) face a similar carbon cost.”
The affect of this would be to shift more of the burden of EITE emissions to other parts of the economy.
Turnbull’s concern with EITEs and the need to follow Waxman-Markey makes the timely comments from Dr Martin Parkinson, made the day before Turnbull’s statement was released, particularly interesting.
Dr Parkinson is the Secretary of the Department of Climate Change, who was addressing the Financial Review Carbon Reduction Conference. In his speech he made specific reference to comparisons between the CPRS and Waxman-Markey:
“[C]ontrary to some claims, neither the US proposal nor the EU Emissions Trading Scheme guarantees 100 per cent assistance to industries at risk of carbon leakage.
Both the EU Emissions Trading Scheme and Waxman-Markey set hard caps as a share of overall permits on the amount of support for EITEs. In both schemes, support will be pro-rated if total EITE emissions exceed the share of permits allocated, as seems quite possible.
It is a matter of mathematics in both schemes that the support for EITEs in total will then decline at the same rate as the national cap. And if total EITE emissions are growing on the back of output growth, the rate of support per unit of output will fall even faster.Because these claims continue to be made despite this information already being on the public record, let me say again that Waxman-Markey does not guarantee 100% assistance to industries at risk of carbon leakage [emphasis added].
The crucial point here is that we have designed the CPRS and the EITE provisions for Australia. Those who argue that we should instead simply adopt the Waxman-Markey model fail to recognise that it has been designed for the United States and does not necessarily suit the Australian situation. We need a scheme built for us and for our national interests.”
It’s unlikely that the government will make any changes to the CPRS legislation between now and August 13th, when it is due to be debated. The Coalition, the Greens, and Senator Fielding will all vote against the bill, with only Xenephon’s vote being uncertain. We can then expect the bill to be re-presented in November.
Between now and then you can expect more negotiations, more lobbying from industry and environmentalists and more political shenanigans, but one thing is certain, Australia will have an emissions trading scheme sooner or later.
Tags: cprs, eite, waxman-markey
