Tuesday, August 26, 2008

Business Council argument "rubbish" says ACF

Carbon bill to backfire, big business threatens

Chris Hammer 
The Age, August 22, 2008

BIG business has attacked the Federal Government's proposed emissions trading scheme, saying it will force companies to the wall or drive them offshore.

But environment groups have responded angrily, accusing industry of promoting "carbon protectionism" through "a rubbish argument", while the Government has said there is not a bottomless pit of money to support heavily polluting industries.

The Business Council of Australia, representing the country's top 100 companies, has analysed the impact of emissions trading on 14 companies and found that three would be forced to shut down immediately if carbon pollution permits hit $40 a tonne.

Another four would need to modify their operations fundamentally and the other seven would have to reduce costs significantly, it said in a report.

The BCA would not release the names of the surveyed companies, taken from across 12 industry sectors.

It said it supported the proposed emissions trading scheme, but compensation was inadequate for companies competing internationally and for electricity generators.

"There are some very significant, and I believe unintended, consequences of the mechanism the Government proposes," BCA president Greig Gaily said. "The reductions in emissions that are being asked of the electricity generation sector are a huge ask if that sector is to make the transition and keep the lights on."

The BCA recommended that Australia should either have modest emission reductions and a relatively low carbon price or fix the price of permits at a relatively low price of between $10 and $20 for each tonne of carbon released into the atmosphere.

"If you go beyond a certain level you'll just achieve your extra abatement at the cost of sending industry offshore," said the BCA report's author, Rod Sims.

But environment groups have denounced its findings, with Australian Conservation Federation executive director Don Henry calling the recommendations irresponsible and "a rubbish argument".

"This is a scare campaign," he said, "and if they're prepared to be that irresponsible with Australian children's future, then perhaps they don't deserve to operate here."

Climate Institute chief John Connor said: "The Government's got to hold its course … it's got to resist these calls that seek to handball the responsibility onto others than the big polluters."

Treasurer Wayne Swan did not sound immediately sympathetic to the BCA's case, saying "we've got to understand there is not a bottomless pit of money here. We will take responsible decisions in the national interest."

Climate Change Minister Penny Wong said: "We have to be very conscious that any decision to shield one sector or increase the protection to one sector will inevitably place greater costs on other parts of the community and on other parts of the economy."

The Government is to release its own modelling of the economic impact of emissions trading in October.

No comments: