Carbon price backing welcome but keep eyes on main game Media Release

Sep 17, 2010 - 11:30am

The Climate Institute welcomed calls from corporate leaders BHP and AGL for early action on putting a price on pollution, saying their actions have demolished some key myths but The Climate Institute urged all parties to keep their eye on the main game of pollution reduction.

“The pyrotechnics set off by a number of business leaders acknowledging the need for a price tag on pollution has been impressive, but policy responses should ensure Australia’s emissions are going down by 2013 and enable bi-partisan backed 2020 targets of up to 25 per cent reductions on 2000 levels,” said John Connor, CEO The Climate Institute..

“Unless our political leaders keep their eye on the main game we risk continuing to fall behind the emerging clean energy super powers and undermining our competitiveness in the emerging global low carbon economy.

“It’s important that this new season of political and business pragmatism not feed staged solutions which defer action across the whole economy.”

One option that has been canvassed in recent days would be to start with a direct price tag on pollution in the stationary energy sector alone. However, without comparable policies such as regulation on other sectors Australia would likely fail to meet bipartisan agreed targets. 

To meet even the 5 percent target this would require over a 30 percent reduction in stationary emissions by 2020. To meet the 25 percent target it would require emissions to be reduced by more than two thirds. 

“Unless all major emitting sectors take responsibility for the pollution they cause, the costs on the whole economy are likely to increase and we may limit the reduction of the pollution dependence of the Australian economy,” Mr Connor said.

Another option that has been canvassed in again recent days is the introduction of a carbon tax instead of an emission trading scheme to put a price tag on pollution.  While taxes may be applicable in sectors not covered by any emissions trading system, the key advantage of an emission trading system is that puts an absolute limit on pollution and allows companies to seek the lowest cost opportunities in Australia and overseas.

“Calls for a patch work of policies to meet Australia’s target may be justified on grounds of pragmatism but risk ignoring over a decade of policy work in Australia which has demonstrated that soft starts, limited coverage of sectors and carbon taxes have major political and policy problems of their own,” he said.

“A carbon tax for example is still open to major rent seeking campaigns from major polluters as they seek exceptions and special treatment.

“The test for the effectiveness of this Parliament is whether it can put real limits and a price tag on pollution that turns around still rising pollution by 2013 and enables significant reductions by 2020. 

“Alongside a price tag on pollution, The Climate Institute supports urgent action on measures to make clean energy cheaper, reduce energy bills and improve energy productivity.”

For more information:
John Connor | CEO, The Climate Institute |  0413 968 475
Harriet Binet | Communications Director, The Climate Institute |  02 8239 6299

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