Rudd Government and Climate Change
Australia's Carbon Pollution Reduction Scheme
On July 16, 2008, the Australian Government released its Carbon Pollution Reduction Scheme Green Paper. While big business and industry have been pleased by the "softly, softly" approach, conservationists are not so satisfied.
According to The Age online, in a July 17th 2008 article titled "Finally, A Blue Print For Fighting Climate Change", business that emit more than 25,000 tonnes of carbon dioxide each year (approx. 1000 companies, which account for 75% of Australia's emissions) will be required to buy permits issued by the government for each tonne of carbon they emit. They will bid in a marketplace to acquire permits, however some industries with exposure in exporting, such as aluminium, will receive free permits. Coal-fired power generators will also receive compensation.
The government will protect citizens from petrol price rises in the first three years of the scheme by lowering the fuel excise, however the price of electricity is predicted to rise 16% and natural gas 9%. Throwing out garbage to landfill will cost more, whereas prices for other products are expected to rise only slightly.
The overall cost of living is forecasted to rise by 0.9%, however the government has pledged to give further financial assistance to pensioners, the elderly, carers, low-income and middle-income households. This assistance will involve, in some cases, increased payments and tax cuts.
Government's Key Commitments
The Australian government has committed itself to 10 major elements of the scheme. These include a promise that money raised from the scheme will be reinvested into Australian households, businesses and clean energy options. The commitments also involve financial assistance to help cope with the extra costs the scheme will create, an annual review of this assistance, support and advice to help Australians become more energy efficient and the creation of a Climate Change Action Fund.
Criticism
Climate Change Advisor, Professor Garnaut, had previously suggested that the fuel excise not be cut and that coal fired electricity not be compensated, but these ideas were rejected, leading to much criticism.
According to the Greens, no rise in the price of fuel fails to send price signals to prevent fuel guzzlers. It is also predicted that assistance to the coal-fired energy sector and compensating large export-exposed emitters (which will receive free permits for 90%of their emissions) will damage the renewable energy sector.
Opposition leader Brendan Nelson claimed the scheme's cost of living increase would be unfair on middle-class Australia, despite promises by the government to assist middle-income families.
One of the world's best known economists, Jeffrey Sachs, pointed out that since the scheme is to be self regulatory, it does not impose strict compliance.
It is also deemed unlikely that this gentle approach to introducing a carbon reduction scheme will help to achieve the Rudd government goal of reducing emissions by 60% by 2050, compared to 2000 levels.
Comments from the Government
Climate Change Minister Penny Wong said that, "After so many years of inaction, it is impossible for Australia to be in front of the world in tackling climate change." This was in justification for the gentle introduction of the scheme. She also stated, "In this green paper, the Government has sought to strike the right balance, on the basis of economically responsible policy in the national interest."
Prime Minister Kevin Rudd also defended the decision to cut the fuel excise, "I think that's a responsible course of action now in order to transition the system to a lower carbon economy longer term, what households need for the economy longer term, as well as looking after our kids."
