The federal government’s planned emissions trading scheme is now on the parliamentary backburner after the Senate on Wednesday refused to debate the draft laws until May.
I think this is wise because the current proposed scheme gives too much to the polluters and apparently ignores small business among other flaws.
The evidence around the world is that carbon pricing works in the long term
What we need are incentives to waste less energy for investment into renewable energy.
I am not convinced that nuclear energy is the way to go because it builds up yet another form of pollution for future generations to cope with, it takes a long time to implement and it is very carbon intensive to set up.
We need our leaders to rationally discuss how to find the least economically disruptive and fairest possible way to ensure our way of life against the risks of climate change.
We need sufficient incentives for businesses and consumers to change their behaviour in a way that can de-link economic growth from emissions levels, and in an acceptably fair way.
This problem will not be solved with political posturing and televised temper tantrums.
There is a definite global trend emerging and that is: mandatory action so we cannot do the ostrich thing and bury our heads in the sand nor can we have leaders turning into robotic and expressionless creatures repeating the same word-perfect nonsense again and again
27 European Union member states have had emissions trading since 2005, and New Zealand will start one in July this year. Japan, Taiwan, South Korea, 16 US states and four Canadian provinces, and even the US congress, are at various stages of legislating their own cap-and-trade schemes. The Norwegians and Swedes (and the French, Irish and Spanish soon will) have direct carbon taxes for certain economic sectors not covered by the EU’s ETS.
I think that the Coalition’s stand is buying us time to have rational debate but we will need a price penalty to give a firm incentive. We do need to be flexible, prepared to learn from mistakes and get the policy design right to create incentives for those long-term structural changes.
Recent studies of the EU ETS, suggest that despite some significant flaws in the way the ETS was initially designed, the evidence points to the following conclusions.
1. The trial phase did significantly reduce emissions.
2. The trial phase highlighted the importance of government initially auctioning emissions permits to industry. The study noted that where big business received free permits, they gained windfall profits. They reap a reward for no abatement from the free allocation.
3. Auctioning a high proportion of permits also allows government to realise a double dividend with the revenue. Other taxes can be removed; deficits reduced; workers in strongly affected industries can be compensated and retrained; and public investments in complimentary emissions reductions that are not suitable for carbon pricing can be made.
Europe is in the process of shifting to auctioning of permits for all but those industries exposed to international competition.
The Australian proposed carbon reduction pollution scheme, does propose to start with full auctioning to all but trade-exposed industry and, for some dubious reason some power generators.
We do need to be flexible, prepared to learn from mistakes and get the policy design right to create incentives for those long-term structural changes.
The emerging evidence from the European Union, the lessons from economic theory, not to mention the global policy trend, is that carbon pricing is an indispensable pillar of equitable, effective and economically responsible climate policy for the long term.
Independent senator Nick Xenophon says believes the best way to tackle emissions is through an ETS but it needs to be an efficient scheme with a higher target and believe we could achieve 15 per cent for the same price as the Government’s five per cent cuts.
At present there is a carbon policy vacuum in Canberra. A recent survey of CEOs shows that business is looking for direction.
Increasingly in Canberra, more intelligent ministers understand that Labour’s emissions trading scheme smells a bit like the insulation scheme in the list of government disasters.
envirojean
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