Repeal of the carbon laws would be a shattering and historic loss to credible climate policy, effectively granting major polluters subsidies of up to $15 billion a year, said The Climate Institute as it
“All parties say they want strong and effective policy to deal with climate change, but tested against key criteria, only the carbon laws come within cooee of credible climate policy,” said John Connor, CEO, The Climate Institute.
“Repeal of the carbon laws will be a shattering and historic loss that will relieve companies of responsibility for their pollution. Using conservative US Government estimates of the economic cost of climate change shows that in the absence of a carbon price, or regulated emissions limits, Australia’s top 10 major emitters will be subsidised to the tune of $6-$15 billion annually. This approach mirrors the International Monetary Fund’s approach to assessing energy subsidies.”
“Repeal of the carbon laws will usher in a new era of regulatory and community volatility that will institutionalise uncertainty and instability for carbon intensive business and those businesses that rely on them. The sooner stable, long-term and effective policy is in place, the sooner our prosperity is on a safer path and Australia can help rather than hinder global climate change action.”
The research reviews current and proposed policies against five criteria of credible climate policy. These are the application of a national carbon pollution budget, the ability to meet 2020 and post 2020 emission targets, ensuring biggest emitters take responsibility for pollution, and supporting independent and transparent structures to assist sustainable policy delivery.
“The Government’s proposed Emission Reduction Fund in its current shape does not add up to a credible, sustainable or effective climate policy. As currently proposed, the policy’s ‘safeguard mechanisms’ will not deliver binding limits on emissions, which in essence removes responsibility from major emitters to factor any climate damage into their operations, and allows them to pollute for free.”
The Palmer United Party (PUP) proposals are unclear. But based on Clive Palmer’s statements, the research brief finds that to deliver the necessary policy framework, the PUP’s policy should mandate the establishment of an operating emission trading scheme linked to international markets before 2020.
“Should the carbon laws be abolished and neither an emission trading scheme or stringent safeguard mechanisms are established replace them, a range of stopgap measures will need to be introduced to come close to meeting the range of Australia’s 2020 emission reduction commitments,” said Connor.
“These measures would include a strategic reserve of government funds to purchase of international emission credits, expansion of the Renewable Energy Target, mechanisms to ensure the timely market exit of ageing high-carbon power generation and mandatory vehicle emission standards.”
Repeal of the carbon laws and the proposals for a replacement climate policy before the new Parliament come just days after the existing laws turned 2-years-old. During this time total emissions have fallen, Australia’s energy mix has become cleaner, cost impacts were minimal, and the economy has grown. (See this Research Brief for more.)
For more information
Kristina Stefanova, Communications Director, The Climate Institute, 02 8239 6299