Climate Institute welcomes progress to low carbon economy Media Releases

Jun 25, 2012 - 11:30pm

The CEO of The Climate Institute, Mr John Connor, today welcomed the release of Professor Ross Garnaut’s discussion paper on carbon emission trading design.

Mr Connor said that Professor Garnaut’s discussion paper has highlighted that securing a global climate deal that is in the nation’s interest requires Australia to implement an effective domestic trading scheme.

“This is a straight forward - and potentially effective - model,” Mr Connor said.

“There are many positive initiatives outlined in the proposal – including recommendations to separate auctioning and operation, from adjustment assistance to affected families, workers and business.

“It is clear that the government will generate a multi-billion dollar revenue stream from emission trading.

“Further, Professor Garnaut recognises that helping low income communities into the low carbon economy should be a top priority for Government.

“However, The Climate Institute remains concerned with proposals that would see Australia putting in place softer short-term climate targets - which may weaken our international negotiating position,” Mr Connor said.

Mr Connor said that the report made stark Australia’s historic opportunity to demonstrate leadership in the lead up to the UN Conference on Climate Change, to be held in Copenhagen next year.

“This report recognises that implementing strong policies on climate change is now in Australia’s national interest,” Mr Connor said.

“Unless we signal that we are prepared to turn around our emissions by 2012, it will be difficult to secure a favourable agreement.

“A transition to a low carbon economy will require bold leadership and meaningful targets,” Mr Connor said.

 
THE EMISSIONS TRADING DIVIDEND

Policy Brief – March 2008

The introduction on emissions trading in Australia is likely to see the Commonwealth Government generating significant amounts of new revenue through the sale of emission permits. Indicatively, in Climate Institute commissioned economic modelling this “emissions trading dividend” was worth between $7-20 billion in 2020.

The size of the emissions trading dividend will depend on the strength of the country’s emission target (or “cap”). The weaker the cap the smaller the dividend - and therefore money available to government to implement structural adjustment initiatives to support the smooth transition to the low carbon economy.

Equity and structural adjustment

The political sustainability of emissions trading as a key plank of Australia’s policy response to climate change depends on equitable distribution of the emissions trading dividend.

Various stakeholders have suggested that this revenue could be used by governments to:

  • offset any energy price impacts on vulnerable low income communities;
  • fund one off adjustment assistance payments to large emitters to offset an the loss of asset value; and
  • fund further development and deployment of new low emission technologies and/or broader macro economic reforms such as reductions in payroll and corporate taxation.

Addressing the impact of emission trading on low income groups must be a top priority targeting spending from the emissions trading revenues. Such spending should focus on providing solutions multipliers through reducing the impact of increases in energy prices at the same time as reducing greenhouse emissions. Such programs could include subsidies and incentives for energy efficient housing and appliances, and increase support for public transport infrastructure.

Managing potential impacts on the disproportionately impacted industries and greenhouse intensive trade exposed sectors will be an increasingly important issue for government. However, careful consideration of an adjustment assistance non greenhouse intensive trade exposed industries will need careful consideration.

Critically, any adjustment assistance must be transparent and overseen by an independent body at arms length of government to ensure the community confidence.

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