Heavy polluters on emission front line

• Michelle Grattan
• The Age, July 14, 2008
• http://www.theage.com.au/national/heavy-polluters-on-emission-front-line-20080713-3ej1.html?page=-1

MEASURES to help households and businesses adjust to a low-emissions economy will be part of a sweeping carbon pollution reduction scheme in the Federal Government's green paper to be released in two days.

The paper will present what the Government calls a whole-of-economy-approach to cutting emissions.

The Government, concerned about the political danger as people become aware of how fighting climate change will hit them, will try to reassure working families worried about higher petrol and energy costs, including by promising adjustment help.

Climate Change Minister Penny Wong said yesterday about 1000 Australian companies — the biggest polluters in the country — would be on the front line of the new emissions trading scheme.

The companies, which will have to obtain carbon permits, are in sectors such as energy generation, transport and large manufacturing and emit more than 25 kilotonnes of greenhouse gases a year.

Opposition environment spokesman Greg Hunt accused the Government of being dishonest in dwelling on 1000 companies. "This is a tax on everything and everyone," he said.

Opposition Leader Brendan Nelson, who was off message on emissions policy for much of last week, will be on leave when the green paper comes out. His spokesman said the leave had been arranged some time ago.

The green paper is expected to propose the inclusion of petrol in the scheme while canvassing offsetting relief for motorists. It is also set to flag some form of help for hard-hit industries such as electricity generation.

But it will not set medium-term targets for reducing emissions, which the Government will release later in the year.

Senator Wong told the ABC that Australia would be shifting from a high-polluting economy to a cleaner and greener economy. That would be a "very substantial transition" requiring a whole-of-economy approach. "That's going to require not only emissions trading, it's going to require assistance and support to households to make that transition and assistance and support to industry and business," she said.

The green paper would outline plans for dealing with households, emissions-intensive industries in world markets, and other industries such as electricity suppliers that would be strongly affected.

The Government was conscious of the impact of emissions trading on this last group. The Garnaut Report recommended no compensation for electricity generators.

Amid speculation the timetable could slip, Senator Wong reiterated the Government's intention was that the trading scheme start in 2010. The Government will release its final decisions on the emissions scheme before the end of the year.

Speaking later, she emphasised: "Every cent of revenue from the scheme will be used to assist households, families and businesses to adjust to the impact of the scheme, including investing in cleaner energy options."

The Government will have a lock-up for the media before the green paper's release, treating it like a budget, because it contains market-sensitive information.

Defence Minister Joel Fitzgibbon said there was no doubt climate change had implications for national security, which meant we had to act quickly.

With rising sea levels, it could result in competition for resources such as oil and water, and big migrations of people. "That would require us to respond at a high level of defence," he told Channel Nine.

Climate change would also result in more serious climate events that would require more to be done in evacuations.

"The question is timing — how long is it going to be before these become serious issues for us? In a sense the answer to that question lies in how serious we are in addressing the issue," he said.

Mr Hunt said there was a threefold test for the green paper. The Government should admit that this was a comprehensive tax and that petrol and electricity costs would go up.

The Prime Minister, Kevin Rudd, and Senator Wong should rule out any new net tax increase on petrol, Mr Hunt said. They should also reverse the budget decision to means test the solar panel rebate.