04/05/2009 - 15:37

Delayed ETS met with mixed response

04/05/2009 - 15:37

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There has been a mixed response to the federal government's back-flip to delay the emissions trading scheme by one year, with some saying the changes do not go far enough.

There has been a mixed response to the federal government's back-flip to delay the emissions trading scheme by one year, with some saying the changes do not go far enough.

Prime Minister Kevin Rudd announced earlier today that the introduction of the government's carbon pollution reduction scheme would be delayed by 12 months to mid-2011.

Trade-exposed export industries will receive greater compensation and the upper limit to the government's 2020 carbon reduction target will be lifted to 25 per cent - from 15 per cent - of 2000 emission levels.

The Australian Industry Group, which represents the interests of 60,000 businesses, said the decision demonstrated the government's recognition of the need to address business concerns.

It also wants legislation setting up the scheme through parliament this year.

"This is critical to establish the degree of certainty business requires in assessing medium and longer-term investment decisions," chief executive Heather Ridout said in supporting the changes.

The Business Council of Australia (BCA) is also backing the government changes, saying the decision to delay introduction of an ETS would provide business with more time to prepare for the scheme.

It would also see all nations placing a comparable price on carbon emissions.

But it believes the new upper carbon reduction target will be difficult for Australia to achieve, "both physically and economically", council president Greig Gailey said.

Businesses face substantial costs in implementing the scheme and their competitiveness remains at risk until there is a global price on carbon, he said.

The Australian Chamber of Commerce and Industry (ACCI) says a delayed and soft start to the ETS will help business.

"More certainty has been provided today in terms of the lower carbon price initially in that first year, which will be a benefit to business in terms of lower energy costs," ACCI's director of industry policy and economics Greg Evans told reporters.

But the chamber still has concerns about what impact a market price for carbon will have on business after 2012.

There will be a one-year fixed carbon price of $10 a tonne when an ETS is introduced in mid-2011.

"We outlined from the very beginning that's an issue for business," Mr Evans said.

The chamber has commissioned modelling into the impact of higher energy costs on Australian business, especially small and medium-sized enterprises, and those that are trade exposed.

"We are hoping that will be finalised at the end of this month or early June to input into the Senate deliberations and the passage of legislation."

Opposition Leader Malcolm Turnbull said the government's decision to delay emissions trading by a year is a massive backdown for Mr Rudd

Mr Turnbull also says the coalition will not support Mr Rudd's amended scheme.

He says the changes, announced on Monday, are a "panic response" to criticisms levelled at the scheme.

"Today's announcement represents a massive backdown given the way he's attacked the opposition for more than a year as we pointed out the flaws in his emissions trading scheme," Mr Turnbull told reporters in Sydney.

He said the 12-month delay meant there was no need for legislation to be rushed through parliament.

He called on the government to refer the scheme and alternatives to the Productivity Commission for scrutiny, saying the coalition would not support the amended scheme.

"Mr Rudd is changing his scheme on the run," Mr Turnbull said.

"On this basis what we've seen today we wouldn't support it.

"But he will no doubt be making other changes as time goes on."

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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