FACTBOX-Views on Australia govt carbon trading draft laws

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CANBERRA, March 10 (Reuters) - The Australian government released its long-awaited carbon trading legislation on Tuesday, sticking to its timetable for a carbon market by mid-2010 and a 5 percent cut in emissions by 2020.

But Senate lawmakers say they will not support the carbon scheme without major changes, possibly delaying the government’s aim for a scheduled vote in parliament in June.

Here are a selection of reactions from industry, scientific and political:

JULIE TOTH, SENIOR ECONOMIST ANZ ECONOMICS AND MARKETS RESEARCH, MELBOURNE:

“They’re still insisting that trading will commence by (mid) next year, so the timetable is looking incredibly tight. I think the actual trading system will go ahead in some form but I wouldn’t be at all surprised to see it delayed by six to 12 months. Also for political reasons, you can see with the changes in the global economy and the Australian economy that it could be attractive to postpone the introduction.

It’s possible the compensation attached to the package will increase if the costs of introducing emissions trading are thought to increase, particularly for the electricity sector.” GARY COX, HEAD OF ENVIRONMENTAL DERIVATIVES NEWEDGE GROUP, AUSTRALIA:

It seems to be almost exactly as they’ve been talking about. From a market point view they’re still allowing 100 percent importation of CERs (Certified Emission Reduction units) which is useful. The real uncertainty is will it get through the Senate and whether (Prime Minister Kevin) Rudd threatens the Senate with a double dissolution (election) as those guys won’t want to face the electorate. It really comes down to two issues — one is what sort of passage it will have through the Senate and secondly it may depend on how bad the economy gets.”

PROFESSOR BARRY BROOK, SIR HUBERT WILKINS CHAIR OF CLIMATE CHANGE, UNIVERSITY OF ADELAIDE:

“The two most obvious problems with the CPRS version of a cap-and-trade, as presented in this legislation, is the proposed cap for 2020 is too weak and free permits are being handed to heavy polluters. Minor problems, like its exclusion of voluntary emissions reductions beyond those represented by the national cap, would be basically a non-issue if the 2020 cap was tighter and more aligned to the actions required to minimise climate change impacts and rapidly decarbonise our energy supply. Parliamentary debate should focus on redefining the percentage reduction in Australia’s emissions by 2020 and in removing perverse subsidies to major greenhouse gas emitters.”

HEATHER RIDOUT, CHIEF EXECUTIVE AUSTRALIAN INDUSTRY GROUP:

“Beginning the scheme in 2010 is in our view unrealistic. The global financial crisis is impeding businesses ability to prepare for and to finance the major emissions reduction strategies. The government needs to rethink the treatment of Emissions Intensive Trade Exposed (EITE) industries to ensure that jobs and business investment, along with emissions, are not shifted offshore. The global economic crisis has drastically reduced the outlook for demand, prices and margins. This has undermined the effectiveness of the White Paper (policy) proposals for EITE industries.”

DON HENRY, EXECUTIVE DIRECTOR, AUSTRALIAN CONSERVATION FOUNDATION:

“It is essential Australia goes to Copenhagen in December as a leader and that means not passing this Bill until it is fixed. If passed without major changes the legislation will see Australia locked into a system that is designed to achieve emissions cuts in the weak five to 15 percent range, which would be putting up the white flag on climate change. Recent bushfire and heatwave disasters are a foretaste of a much worse future if we don’t act now. It is in Australia’s national interest to act urgently and strongly to tackle climate change.”

RALPH HILLMAN, EXECUTIVE DIRECTOR AUSTRALIAN COAL ASSOCIATION:

“The collapse in global commodity prices has seen prices for coal more than halved since mid 2008. The impact of emissions trading will be to reduce already thin margins even further and threaten the jobs of more Australians. The government had offered to provide only A$750 million over five years to address this serious threat to the industry’s international competitiveness. When company tax is taken into account, this will be less than 10 percent of what the CPRS will cost the industry over five years. The emissions trading scheme will place a tax on the industry of some A$5 billion dollars over the next five years mainly due to its fugitive emissions.”

AUSTRALIAN GREENS SENATOR CHRISTINE MILNE:

“The emissions reduction targets that would be enshrined in the objects of this Bill are patently inadequate and would see Australia holding back the global effort to prevent climate catastrophe. Five to 15 percent reductions by 2020 are nowhere near the 40 percent reductions that are necessary from one of the world’s biggest polluters on any measure.”

TIM HANLIN, MANAGING DIRECTOR OF THE AUSTRALIAN CLIMATE EXCHANGE

“There’s nothing to indicate that the government is deviating from their path. It’s like no news is good news. This once again gives every indication that it’s a well-thought-through proposal, whether you agree with it or disagree with it.

“It’s clear the government has thought through the detail, such as instruments that can be used in the scheme that aren’t necessarily Kyoto instruments. So it’s already contemplating the possibility of linking with, say, a New Zealand scheme or even a U.S. scheme. From that perspective it’s a very comprehensive approach.”