THE Latrobe Valley is likely to be the worst affected region in Australia under emissions trading and needs pre-emptive action to help it cope, the State Government says.
In its first major response to the Federal Government's emissions trading blueprint, Victoria calls for a soft start to tackling climate change, including a guarantee that coal-fired power stations would not have to pay a penalty if they breached greenhouse caps in the early years.
It recommends Canberra create a fund to help the worst-hit regional communities adapt.
This would initially involve a study into the impact on the region's skill and labour needs. Money could also be spent helping develop low-emissions technology, such as capturing carbon dioxide and storing it underground, and retraining brown-coal workers who lose their jobs. About 3000 of the Latrobe Valley's 73,000 people work in the electricity sector.
"As home to Victoria's sizeable brown coal resource, the Latrobe Valley is vulnerable to adverse economic consequences," the submission says.
While it calls for intervention, the paper makes little reference to concerns spelt out in an earlier Victorian submission - to the Council of Australian Governments - that emissions trading could threaten the state's power supply.
But it challenges the Federal Government over transport. Victoria questions Canberra's promise to cut fuel taxes to cancel out any rise in petrol prices due to emissions trading, warning it may turn people away from public transport, which would not be immune from the extra cost.
Victoria's submission is one of hundreds lodged over the past week in response to the Federal Government's emissions trading discussion paper released in July. Climate Change Minister Penny Wong faces intense pressure, mainly from business groups, to soften the scheme before the final model is released in December.
Other recommendations in the Victorian submission include continued reform of the energy market.
The Brotherhood of St Laurence has warned that poor households need immediate help to cut their energy bills so they do not lose out under emissions trading.
A report by the charity says modelling shows people on low incomes in private rental properties will be worse hit by rising costs than other types of households.
Meanwhile, the Liberal Party's new federal leader, Malcolm Turnbull, has stepped back from the tougher stance on emissions trading promised by Brendan Nelson on his last night as opposition leader.
"Our policy as of today is as it was following the recent party meeting, and indeed as it was under the Howard government," Mr Turnbull said yesterday. He said that included emissions trading starting in 2011 or 2012.
With CHRIS HAMMER