Wednesday, July 16, 2008

The good, the bad and the ugly

Adam Morton 
The Age, July 17, 2008

THE environmental lobby has given the Government's plan to cut greenhouse emissions a mixed report card: polite praise for its urgency, but damning criticism for compensating coal-fired electricity generators and doing nothing to discourage people from driving.

While all welcomed the decision to stick with a 2010 starting date, green groups attacked the emphasis on compensation for heavy-polluting industry and the decision to offset any petrol price rise with a corresponding fuel-tax cut.

All said the biggest test was yet to come: the medium-term target for 2020, to be set before the end of the year, which will determine how quickly emissions are cut.

The harshest criticism was saved for the Government's decision to defy adviser Ross Garnaut's recommendation not to offer direct help to heavy-polluting, coal-fired power stations. Under the Government's plan, they will either be paid an unspecified amount of compensation or given free pollution permits on the grounds that the country needs to encourage healthy investment in the electricity supply.

WWF Australia chief executive Greg Bourne said power stations had known for 20 years that greenhouse emissions would be regulated, and had no case for free entry to carbon trading.

"Every cent spent on providing assistance to existing power stations is money not spent on supporting clean energy research, households and trade-exposed industries," he said.

Mr Bourne also said any cut to fuel taxes to protect motorists should be a one-off.

"It is very important that price mechanisms are not interfered with further down the track because this will reduce the incentive to invest in clean transport alternatives," he said.

The Australian Conservation Foundation said paying electricity generators compensation would weaken the effectiveness of the scheme.

"The more compensation that goes to big polluters, the bigger the financial burden on the poor, the most vulnerable and rural Australians," ACF climate change program manager Tony Mohr said.

He said cutting the fuel tax would make little difference to family budgets and leave less money for public transport and improving car efficiency.

Climate Institute chief executive John Connor said the discussion paper was "a good start, but not a great start".

He said it had fallen short in its failure to offer support for developing countries and the lack of clarity over what incentives would exist to invest in clean energy technology.

Mr Connor said the fuel tax cut would "rip billions" from a fund to help businesses adapt, but was unlikely to be replaced.

It would also send the wrong signal to consumers, he said.

"Indeed, this may leave people more exposed to global oil price shocks if they believe they will be protected in future."

Total Environment Centre executive director Jeff Angel said the Government had fallen for a coal-fired power scare campaign.

"Polluting industries such as coal-fired power stations, energy-hungry smelters and land clearing get favoured treatment - this is a recipe for a scheme standing on weak legs," Mr Angel said.

The Australian Youth Climate Coalition said giving free permits to heavy polluters was "like telling smokers to quit while giving them free cigarettes".

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