Monday, August 25, 2008

ETS money can help lo-carb economies: institute

UP TO $11 billion generated from the Federal Government's emissions trading scheme over 10 years should be channelled overseas to help developing countries make the transition to a low-carbon economy, says a leading economic advisory group.

The plan comes in a policy paper by the Climate Institute, which has called on business to support the move.

Institute chief executive John Connor said allocating 10% of the revenue raised through the Government's carbon pollution reduction scheme to help developing countries grow while cutting carbon emissions would mitigate climate change.

"In the European Union there is a proposal to dedicate the revenue raised from including aviation into the trading scheme towards developing countries. Mexico has a similar proposal," he said. "It is time for Australia to get on board as well. This would generate $11 billion by 2020 and that is far better than investing $150 million here and $150 million there."

The proposal would be in addition to the Clean Development Mechanism, developed under the Kyoto Protocol as a private sector-based fund devoted to assisting developing nations in mitigating climate change.

The fund has come under fire at the UN-sponsored climate change talks in Ghana, which conclude tomorrow. Many African counties have expressed anger that only about 2% of the entire CDM projects worldwide are locally based, compared with 45% in China, 16% in India and 13% in Chile.

Mr Connor said the climate discussions showed that more needed to be done in developing countries and said the Business Council of Australia should show leadership on the issue and encourage government to adopt its policy.

He attacked modelling commissioned by the BCA that showed that of 14 companies selected three would shut, four would have to restructure their operations and the remaining seven would need to cut costs in response to the Government's emissions trading scheme.

"Essentially (through this analysis) they are seeking to put a carbon pollution wall around several of the big polluters. I won't say that I am overwhelmingly confident of businesses' support on our proposal but they need to sit back and take a look at the bigger picture."

A spokesman for the BCA said the council supported the revenue allocation outlined in the Government's green paper, which allocated 30% towards business.

"We agree that Australia will need to use the revenue from permits to deal with its emissions-intensive, trade-exposed businesses, strongly affected industries, assistance for low-income households, and research and development," he said.

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