Friday, July 4, 2008

Garnaut urges bipartisan support for EST

By Online parliamentary correspondent Emma Rodgers

ABC News Online, Posted 2 hours 23 minutes ago

Professor Ross Garnaut has warned that without bipartisan political support, a strong emissions trading scheme would be compromised.

Professor Garnaut's report on climate change, released today, says an emissions trading scheme should be introduced without delay.

He says such substantial reform needs support from both sides of politics to maintain the integrity of the scheme.

"If you don't have political bipartisanship then there's more risks you'll make arbitrary adjustments for political reasons," he said.

"Once you start making arbitrary adjustments it's not very easy to hold the line against making more and you could end up with a bit of a mess of the scheme."

In recent weeks, the Federal Government and Opposition traded blows over when a scheme should be introduced and what areas of industry should be included in the scheme.

The Opposition was also accused of creating a scare campaign by pulling back from its original support of parts of Labor's policy for the scheme, such as the inclusion of transport and petrol.

Professor Garnaut has recommended that transport be included and the scope of the scheme be as wide as possible.

The implementation of the scheme has been described as one of the biggest policy challenges the Rudd Government will have to face and will have vast impacts on the economy.

However, Professor Garnaut does not think introduction of the scheme should be regarded as having negative impacts on the Government, which may face pressure from consumers over raised petrol and electricity prices.

"I think that there are ways of managing these matters that could become substantial pluses, especially given the Australian communities interest in the matter," he said.

"If Government is disciplined in making sure that it sells through competitive processes all of the permits within the system, it will have substantial amounts of revenue to reduce the costs of transition of he new regime."

Today's released report proposes that half of the revenue raised from selling carbon permits should be used to compensate households and there should be a special focus on those on a low income.

Professor Garnaut says money can be returned to the public through tax cuts and welfare payments.

He also concedes that the wider public does not understand much of the detail of how a scheme would work but says people are supportive of reform.

"I think the Government has a very strong base there from which to build a program of public education," he said.

The report recommends that an emissions trading scheme should begin in 2010 but the first two years can be transitionary, with a low carbon price for permits.

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