Mixed reaction to emissions trading scheme

ABC News Online, Posted 3 hours 16 minutes ago 

Updated 2 hours 40 minutes ago

• http://www.abc.net.au/news/stories/2008/07/16/2305565.htm
• Related Story: Wong unveils trading scheme details

Green groups are applauding the inclusion of transport in the Federal Government's emissions trading scheme, but the renewable energy sector claims the coal industry is being favoured over alternatives.

The head of a company developing trade in carbon emissions, though, has welcomed the Government's Green Paper for the breadth of its emissions inclusions and its pledges to provide lead times for industry to adapt.

Stuart St Clair, chief of the Australian Trucking Association, says including transport is the fairest option.

"Because it spreads the cost of this across the whole of the nation and therefore more people sharing in the costs means the costs will be kept to a minimum amount," Mr St Clair told The World Today.

Transport is the third largest source of greenhouse gas emissions in Australia, making up about 14 per cent of the country's total emissions and growing.

And a key transport advisory group, the National Transport Commission, says the Government should do a lot more to help cut emissions in the rapidly growing freight sector, where emissions are expected to rise 30 per cent by 2020, putting an extra 50,000 trucks on Australian roads.

Tim Eaton, general manager of safety and environment for the National Transport Commission, says with reductions targets likely to be tough across the economy, transport will need to play a part.

"And freight transport will need to play a role in that," Mr Eaton said.

"Now the freight transport emissions are much smaller than the light vehicle emissions but they're growing just as fast, if not faster and as other sectors start to wind down their greenhouse output, freight will be looking vulnerable unless we get onto this issue straight away."

But the Commission, which advises Federal and State Governments, says an emissions trading scheme is only one part of the climate solution, listing other options in a discussion paper including a congestion tax for cities, such as the one operating in London, improving vehicle configurations and ironing out transport bottlenecks which lead to inefficient driving.

'Dangerous precedent'

Environment groups are happy to see transport included but say cutting fuel excise to compensate drivers undermines the trading scheme with a better use of the money raised from the fuel excise being investment in public transport.

The chief of the Climate Institute, John Connor, also says compensating for petrol price rises could set a dangerous precedent.

"If we do this for all the noisy interests, they get special deals all round the place, it's like poking a hole in the ship which we're trying to leave the shores of a very high carbon and polluting economy," he said.

"We'll never leave there, we'll be marooned on the beach.

"There's a question about whether we're really just making some of these communities more vulnerable to the increases in global oil prices if they think there is going to be future protection for petrol prices. So we think it's not smart and it's not well targeted."

The Greens' Environment spokeswoman Christine Milne says she is disappointed with the Government's decision to protect some of the country's major emitters.

"Kevin Rudd has caved in to pressure from the coal industry and the aluminium industry and what we are going to see is no changed behaviour and a much larger task for people in five to 10 years time," she said.

Renewables

The renewable energy sector says there is a serious shortfall in the Government's emissions trading aims, claiming Canberra has misled Australians on its level of commitment to renewables.

Sustainable energy expert from the University of New South Wales, Professor Mark Diesendorf, says funding for renewable technologies is only available from July next year, whereas research and development for clean coal has already been made available in this year's budget.

"The (Industry) Minister's response on renewable energy has been very misleading," Professor Diesendorf said.

"He says there are two renewable energy funds included in this year's budget, but the truth is that no money has been allocated from either of those two funds for renewable energy for the purposes that have been stated."

Susan Jeanes from the Climate Institute also heads up the Australian Geothermal Energy Association, which promotes emerging renewable technologies.

"It's certainly not optimum that funds are delayed," she said.

"Legal contracts take anything up to 12 months to 24 months to put together so we are in a process and it's important that the process starts now, not that we find that the money has been allocated in next financial year and that the process is only just starting," she said.

The 2008 Budget has allocated $500,000 towards low emission coal technologies.

The CO2 Cooperative Research Centre is the peak research body for clean coal technology.

Chief executive Peter Cook says making money available to his organisation this financial year will not make a significant difference.

"I suspect you'd find only a very, very small amount will be spent this year because as I say it takes a long time to put these projects together, that's really the key element on the timing, not a government announcement about exactly when the money is available," he said.

Industry Minister Martin Ferguson says low emissions coal and renewable technologies are not competing alternatives with the government, he says it is investing heavily in both.

One company looking closely at the Government's emissions trading scheme is Envex, which is seeking to link the nine smaller schemes operating across Australia with a view to developing a market for trading domestically and internationally.

Led by the Macquarie Group, Envex general manager is Vincent Cornes, who welcomed the scheme for its breadth, its targeted support and its intention to give industry lead times to adjust.

He says the real test will be in the detail as it emerges.

"Over the next six to 12 months those details will come out, and as those details come out companies will start to plan their investments and we'll see the process of price discovery in the market continue," he told The World Today.

"We've already seen a number of trades in contracts for Australian emissions allowances take place. So we'll see that process develop as more detail comes out and I certainly believe that the information that's come out in the green paper is a very good starting point."