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Graham Kraehe bags carbon trading scheme

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“The Australian economy will survive the economic downturn but it may not survive the emissions trading system,” Mr Kraehe, chairman of BlueScope Steel, told a Courier-Mail-sponsored Australian Institute of Company Directors function yesterday.

He said BlueScope’s board could not commit to a proposed investment of more than $1 billion in an emissions abatement project under the draft regulations.

Also yesterday Woodside Petroleum warned that the scheme threatened the creation of thousands of jobs in the liquefied natural gas sector.

Woodside Energy executive vice-president Robert Cole told the Senate Select Committee on Climate Policy in Brisbane that getting the design of Australia’s carbon pollution reduction scheme (CPRS) right was crucial.

“If we don’t get the design right, independent modelling suggests Australia’s natural gas exports would be half the size by 2030,” Mr Cole said.

“Australia currently produces around 9 per cent of world LNG – we have the opportunity to triple our LNG exports, but the danger here is we will forgo this opportunity.

“The lost opportunity could be tens of billions of dollars of investment and tens of thousands of potential jobs.”

Mr Cole said LNG contributed to global greenhouse gas reduction.

Mr Kraehe said the CPRS would tax Australia’s largest exporters and employers, making them uncompetitive and putting their employees’ jobs needlessly at risk.

“In other words (it will be) a $2.5 billion de-stimulus package that will have serious impact on Australia’s competitiveness and on regional economies,” he said.

Mr Kraehe, who also sits on the Reserve Bank board, said it was disappointing the Government was still sticking to its 2010 deadline for the scheme, despite its “obvious and serious flaws”.

The scheme is due to start on July 1 next year. It is intended to help Australia reach a target of cutting greenhouse gas emissions by between 5 per cent and 15 per cent of 2000 levels by 2020. The Government’s long-term target is to cut emissions by 60 per cent by 2050.

Mr Kraehe said BlueScope supported the Government’s stated environmental and economic objectives on climate change. But he urged business to immediately engage in more forthright debate with government on the issue.

Mr Kraehe said government had failed to listen to the concerns of business over the issue.

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