Home | Business News | Browse by Publication | A | Arena Magazine

All smoke and mirrors? Carbon trading in Australia: Peter Christoff applies six tests for the proposed carbon trading schemes.

Article Excerpt
Climate change is high on the political agenda in the run-up to the 2007 election, carbon trading is all the buzz, and politicians are trading 'hot air' in increasing volumes as the year wears on.

John Howard opposed carbon emissions trading until the end of last year. He rejected it in Cabinet in 2003 and ruled out the introduction of a national scheme in 2006. But he is now vigorously promoting the idea of an Australian carbon market alongside his preferred technological solutions to climate change, nuclear power and 'clean coal'.

The Prime Ministerial Task Group on Emissions Trading was established in November 2006 to advise on development of an Australian scheme. Its report was released at the end of May and Howard's response to its recommendations will define the government's stance on climate change in the run up to the election. So far, the signs are not good.

The Task Group comprised senior Federal bureaucrats and industry representatives, including Peter Coates (Chief Executive of Xtrata Coal), Tony Concannon (Managing Director, International Power), John Marlay (CEO, Alumina Ltd) and Chris Lynch (Director, BHP Billiton). Its terms of reference are worth quoting in full:

Australia enjoys major competitive advantages through the possession of large reserves of fossil fuels and uranium. In assessing Australia's further contribution to reducing greenhouse gas emissions, these advantages must be preserved.

Against this background the Task Group will be asked to advise on the nature and design of a workable global emissions trading system in which Australia would be able to participate. The Task Group will advise and report on additional steps that might be taken, in Australia, consistent with the goal of establishing such a system.

Perhaps unsurprisingly, the Task Group's report has proved largely to be a case of smoke and mirrors. It neatly reflects the orientation of the Government's energy white paper, Securing Australia's Energy Future, published in 2004, and Howard's own position on global warming. It is strongly biased towards the fossil fuel sector, suggesting no immediate action be taken to wean Australia from its growing dependency on the carbon economy.

Howard in turn has used its cautious, low-key response to the need for targets and a carbon price to try to wedge Labor on the climate issue. He has returned to the themes, rhetoric and scare tactics he deployed a decade ago --about the need to preserve economic prosperity, how targets and significant early action would be bad for the economy--to demonstrate how he is the reasonable broker on this issue and Labor and the Greens the climate...

View this article FREE - Now for a Limited Time, try Goliath Business News
Free for 3 Days!