Coal industry cries foul over 'political' ETS exclusion

ABC News Online, 10th March 2009

• http://www.abc.net.au/news/stories/2009/03/10/2511605.htm
• Related Story: ETS unduly influenced by industry: Garnaut
• Related Link: The Government's 2008 White Paper on the Carbon Pollution Reduction Scheme
• Related Link: 2008 Treasury modelling of the potential economic impacts of emissions reduction

The coal and mining industries have accused the Federal Government of putting political concerns ahead of environmental concerns in designing its emissions trading scheme.

The Government will publicly release the draft legislation for its Carbon Pollution Reduction Scheme today.

The coal industry is set to get hundreds of millions of dollars in compensation, but no free emissions permits, while industries such as liquid natural gas, identified as trade-exposed, will not have to pay for 60 per cent of their emissions.

Coal lobbyists say the sector has the same reliance on export markets as the natural gas industry, but is being exluded due to fears of a political backlash.

The Australian Coal Association's Ralph Hillman told ABC 1's Four Corners program, his industry is missing out because the Government did not want to be seen to be supporting coal.

"It's a political decision, coal has been to some extent vilified in the press and elsewhere, and in the public's mind is associated with climate change," he said.

"Government may feel inhibited about being seen to give it the sort of assistance it's giving other industries."

Anonymous allegations

Mr Hillman said he had personally been told this was the case by government officials, but refused to specify who had told him.

"We heard it from officials, government officials or whatever one deals within government. I don't want to be specific," he said.

Mitch Hooke from the Minerals Council echoed the claims, saying a MP told him the coal industry would not get free permits because of political concerns, but also would not name the MP.

Climate Change Minister Penny Wong told the program she could not comment on the claims.

"What I can tell you is that, what I was presented with and what the Government was presented with was data which showed that the emissions intensity, unlike some other activities, the emissions intensity from different coal mines was vastly different," she said.

"So you had enormous differentials, so if you draw an industry average then you're going to advantage some and disadvantage others, so we sought a different method."

Senator Wong says she is releasing the draft legislation to allow more public consultation.

Uncertain future

The Government has already detailed how emissions trading will work, and the Climate Institute's John Connor says he is not expecting any surprises in the legislation.

"I think they are going to try and actually stick with the White Paper," he said.

But the scheme is facing an uncertain future in the Senate.

Independent Senator Nick Xenophon says he is not convinced the plan strikes the right balance.

"I've got a very real concern about the design of this particular scheme," he said.

"The consequences to the economy, to jobs, will be very, very significant."

The Opposition believes the scheme will cost jobs, while the Greens are pushing for bigger cuts to the carbon emissions target.

Mr Connor says it is clear the Government will need to make significant changes to secure enough support in the Senate.

"Certainly if they're going to try and get the Greens and independents, they're going to have to come up with stronger targets," he said.