May 05, 2009 - 1:49pm
The Government’s amended Carbon Pollution Reduction Scheme (CPRS) sends immediate signals the risks of future investments in high-polluting assets; is better targeted at a global agreement and increases transparency for transitional assistance, the Climate Institute said today.
“This reform package is worthy of support because it focuses our minds on the real prize - an effective global climate agreement. It also provides greater transparency for the transitional assistance and sends an immediate signal to investors about risks of high-polluting investments and potential benefits of investing in low-carbon, jobs and industries,” said John Connor, CEO of the Climate Institute.
“What Australia does in the global negotiation matters and until yesterday our negotiators were bound to use their influence constrained by the tragically inadequate 15% reduction target. This was poisoning the ambitions of negotiators from Australia and other countries. “
Australia chairs what’s known as the Umbrella Group including USA, Canada, Japan and Russia, a group that has been in the past extremely effective in wrecking progress. Informally we also facilitate many strategic considerations of developed countries as a whole.
“Australia’s 25% reduction is credible because our analysis suggests, based on various models of a fair distribution of emissions rights among industrialised countries, that as a group developed should be cutting emissions by between 30 per cent and 40 per cent on 1990 levels by 2020,” Mr Connor said.
“This positions Australia to push developed countries to even stronger reductions than their conditions yesterday, towards the top end of the 25 to 40 percent change indicated by the Intergovernmental Panel on Climate Change and being discussed internationally.”
The package has increased transparency on the assistance to the big polluters with an institutionalised commitment for some hard headed analysis from the Productivity Commission on the real state of play on real and proxy carbon prices in other countries and an immediate review of assistance if an ambitious international agreement is reached.
“While not ideal, the one year delay should not dampen the biggest initial impact of the CPRS in driving longer-term investment decisions. With the prospect of a 25% reduction on 2000/1990 levels by 2020 on the table, business will now, without delay, have to factor this into medium and long-term investment decisions,” said Mr Connor
“High-emitting assets, such as coal-fired powered power stations, will become less attractive and higher risk investments.
“On balance, the Climate Institute believes the yesterday’s announcements along with the Renewable Energy Target and the foundations of a national energy efficiency strategy outlined by COAG last week form a solid base to position Australia as a country prepared to reap the benefits of a low emission recovery.
We will of course continue to argue more needs to be done in other areas but the time for endless debate is over and the time for action has come.”