What do the industry bodies think?
Most business groups have welcomed the move to an emissions trading scheme.
“The government’s decision to move early to scrap the carbon tax and commence emissions trading is a positive move that will cut business costs while still meeting the emissions targets shared by the major parties,” Australian Industry Group CEO Innes Willox said yesterday.
“We will be looking for more detail. But, in principle, a switch to much lower internationally linked carbon prices next year would be very positive for businesses struggling with high energy prices and lost competitiveness.
“The earlier move to emissions trading would cut the carbon price by as much as three quarters, while not reducing our capacity to meet the objectives of reducing emissions in line with Australia’s targets.”
However, the Queensland Resources Council has said the changes raise more questions than answers on Australia’s carbon pricing.
QRC chief executive Michael Roche said the government had a number of crucial questions to answer, including whether the scheme would allow European Union politicians and bureaucrats to effectively set Australia’s carbon price, and whether the scheme would lock in Australian firms to buying local permits, excluding them from the European market.
“If the federal government’s answers to each of these questions is ‘no’, then clearly the intent is no more than a political fix in the shadow of an election, not the fundamental rethink that is so badly needed to ensure Australia’s trade-exposed industries can be internationally competitive,” Roche said.
The earlier move to an ETS has been criticised as a “cowardly act” by the Australian Greens and “a name-changing exercise” by the opposition.
What about the election? What would the Liberals do?
The date given for a move to the ETS was July 2014, which is after the last possible date for the next federal election.
This means the policy hinges on Labor being re-elected to government, a prospect which, until recently, looked unlikely.
This morning’s Nielsen poll is the latest to show the government and opposition neck-and-neck in the polls.
But if the Liberal opposition does what is largely expected and wins government, its current policy remains to scrap the carbon tax.
This would mean no emissions trading scheme, and instead, a range of “direct action” policy measures intended to pay businesses to reduce their carbon emissions.
Some of these measures include paying businesses up to $40 per tonne (though usually less) to reduce their carbon emissions. This means the Coalition’s plan values emissions at far above the $6 per tonne currently being proposed by the government. However, it would be a cost borne by the public out of general taxation, and not billed directly to polluters.
Myriam Robin is a media reporter at Crikey. She’s an economics graduate who previously reported on business for LeadingCompany and SmartCompany.
