Monday, August 10, 2009

Cap put on Turnbull's plan

Michelle Grattan

The Age, August 11, 2009

NATIONALS Senate leader Barnaby Joyce has dismissed the Opposition alternative to the Government's emissions trading scheme, saying Labor won't buy changes because it wants a double dissolution trigger.

The Government yesterday pulled out all stops to discredit the proposal. Climate Minister Penny Wong labelled it a ''mongrel'' and claimed it would increase investor uncertainty.

Opposition leader Malcolm Turnbull unveiled modelling for a ''greener, cheaper, smarter'' scheme that would double the Government's emissions reductions - to 10 per cent on 2000 levels by 2020 - while saving $49 billion (40 per cent) on the Government's plan over the next 20 years.

Mr Turnbull and his emissions trading spokesman, Andrew Robb, were anxious to have something positive to put forward to counter inevitable criticism when the Opposition votes down the Government scheme in the Senate on Thursday. But the plan, a long-term hobby horse of consulting firm Frontier Economics, which did the modelling, is not even Opposition policy and has not yet been put to the party room. Mr Turnbull also admitted it had not been considered when, as environment minister in the Howard government, a scheme was being prepared. He said this particular scheme had not been presented before, although he conceded the broad approach had been around for some time.

The modelling was commissioned jointly by the Opposition and independent Nick Xenophon. Senator Xenophon appeared at a joint news conference with Mr Turnbull, but Nationals leader Warren Truss did not.

Mr Turnbull said the time had come for the Prime Minister to sit down with the Opposition and independent senators and ''discuss a better scheme''. But the Opposition is not looking to move amendments this week. They would have to wait until the Government brings the legislation back a second time, when, if defeated, it would qualify as ''trigger'' legislation for a double dissolution.

Senator Joyce said the modelling added to the debate but the Government was never going to consider Opposition amendments seriously.

''They don't want a result, they want a fight … They want to bring on a double dissolution and have an election,'' he said.

The scheme, a hybrid cap-and-trade approach, allocates permits to electricity generators according to a ''baseline'', rather than buying permits for all emissions. This means electricity prices would rise less and more slowly than under the Government's model.

Frontier Economics says wholesale electricity prices would rise by about 5 per cent in the short term, and then increase slowly over two decades to be about 25 per cent higher than they would have been without a scheme. This compares with an immediate rise of 40-50 per cent under the Government scheme - a retail price rise of about 25 per cent.

Senator Wong said that having previously argued for Australia to copy the US legislation, Mr Turnbull was now arguing for Australia to copy the failed Canadian model, when the Canadians were moving to a cap-and-trade scheme. She said the scheme ''is not a hybrid, it is a mongrel''. ''It is not a credible alternative; it is a smokescreen.''

The Greens condemned the proposal as launching a ''polluters' auction'', while the Australian Industry Group was ''profoundly concerned'' at the suggestion of Australia adopting a 10 per cent unilateral target. The Climate Institute released an Auspoll showing 78 per cent of Australians wanted the Liberals to back the current legislation.

A separate report released yesterday by the Committee for Economic Development of Australia warned an emissions trading scheme could lead to a ''carbon finance bubble'' that dwarfed the global financial crisis.



1 Minimum 10% emissions cut on 2000 levels by 2020.

2 Economic growth trimmed by $72 billion over 20 years. 29,000 fewer jobs created.

3 Annual electricity bill to rise by up to $44 in five years.

4 Trade-exposed industries get 100% of permits free.


1 Minimum 5% emissions cut on 2000 levels by 2020.

2 Economic growth trimmed by $121 billion over 20 years. 37,000 fewer jobs created.

3 Annual electricity bills to rise by up to $280 in five years.

4 Trade-exposed industries get 66 or 94.5% of permits free.

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