Coalition ETS proposals cause cost blowout Media Release

Oct 19, 2009 - 2:30pm

The Coalition’s proposed amendments to the Government’s Carbon Pollution Reduction Scheme (CPRS) would give big polluting exporters an additional $3 to $6 billion to 2015 and put the handbrake on investment in improving our low-carbon competitiveness, according to preliminary analysis by The Climate Institute.

“Australia is one of the most energy inefficient and least carbon competitive economies in the developed world. Giving billions more to polluters is mining future permit revenues to pay polluters of the past not investing in the clean energy jobs and industries growing globally now and for years to come,” said John Connor, CEO of The Climate Institute.

“The claim to be protecting Australian jobs is a smokescreen for old fashioned polluter protectionism. All the credible economic modelling shows that even under significant carbon pollution reductions the economy and jobs continue to grow.”

While awaiting more detail, the Initial assessment of the Coalition package by The Climate Institute is that:

  • Trade exposed industries – on 5 to 15% pollution reduction targets the $17 to 22 billion production subsidies already on offer to 2015 would be expanded by an additional $3 to 6 billion (Coalition supports a potential 25% target with comparable global effort requiring assistance review).
  • Electricity generators – unconditional tripling of free permits puts at risk billions of dollars that should be invested in clean energy and other clean technology solutions.
  • Farming and land clearing - contributes 25% of national emissions, blanket exemption with no alternative, is an attempt to insulate against the inevitable, missing opportunity to integrate potential rewards and responsibilities.
  • Coal mines – exemption of coal mine fugitive emissions will requires strict regulation to ensure this profitable and expanding sector contributes its fair share of national pollution reduction, the Coalition’s alternative require more detail.
  • Energy efficiency - in the absence of equivalent national policies, a national “white certificate” trading scheme additional to CPRS is a positive proposal to help unlock efficiencies in businesses and households.

International financing, a key sticking point in global climate talks was not addressed.

“Australia needs to be promoting credible and effective domestic and international mechanisms to help achieve an effective global climate agreement, this means a stronger CPRS with built in financing for investment in clean technology and avoiding deforestation in neighbouring developing countries, as well as helping them prepare for the unavoidable impacts of climate change,” Mr Connor said.

“Both the Coalition and the Government continue their silence on financing mechanisms, this is a huge credibility deficit for both who claim to be serious about wanting a global agreement.

“On the whole the Coalition proposals should be rejected without substantial changes.”
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