Tough Road Ahead in Australia For Pioneering Carbon Trading Scheme

19 March 2009

The Australian government is facing mounting opposition to its pioneering carbon trading scheme after it unveiled legislation it hopes to pass by the middle of this year. Australia is proposing what could be the most sweeping cap-and-trade system in the world, including a commitment to cut carbon emissions by five percent of 2000 levels by 2020. The system would work by forcing companies to pay heavily for their pollution.

February's bushfires in the southern Australian state of Victoria, which killed more than 200 people, were, according to some researchers, a deadly glimpse into the future.

There is a warning that the Australian continent is particularly vulnerable to the effects of a shifting climate and that wildfires, drought and tropical storms will become more common and increasingly severe.

Armed with what it believes to be compelling scientific evidence, the government in Canberra earlier this month released details of a comprehensive carbon pollution reduction scheme or CPRS.  

Its overall aim is to encourage big companies to produce less carbon emissions by forcing them to pay for the pollution they emit.

Richard Denniss, from the Australia Institute, which is an independent public policy research center, says the plan is ground-breaking.

"The CPRS is designed to put a price on pollution for the first time in Australian history and by limiting the amount of pollution that can be put into the atmosphere and asking polluters to buy the right to pollute, what we're trying to do is get polluters to take seriously the need to reduce their emissions," said Denniss.

The proposal will be the world's broadest carbon trading mechanism, covering 75 percent of Australia's greenhouse gas emissions, which many scientific experts believe are contributing to rising temperatures.

Australia is one of the world's worst greenhouse gas polluters.

About 1,000 of Australia's biggest polluters, from transport operators and aluminium producers to gas companies and refineries, will have to pay to pollute through a permit system.

The scheme has attracted widespread criticism. Conservative opposition parties and the powerful mining industry want the project delayed to soften the blow for businesses that will shoulder higher costs during a recession.

Opposition lawmaker Andrew Robb says in its current form, the draft plan is flawed.

"I don't know anybody who supports the scheme, as currently defined by the government," said Robb. "It will cost jobs, it will kill investment, and will not do anything of any consequence about CO2 emissions.'

Environmental campaigners have demonstrated against the plan, which is detailed in a proposal 490 pages long, and are demanding even tougher targets to reduce emissions.

"I think there have to be very substantial amendments," said Green Party Senator Christine Milne. "The government has said that their legislation is as big as a Canberra phone book, but what we know is it's full of wrong numbers."

For the draft carbon trading legislation to become law, Australia's left-of-center government needs in the upper house of parliament, the Senate, the support either of conservative lawmakers or the Greens and two independent senators.

Climate Change Minister Penny Wong says while critics see the scheme as imperfect, it is better than nothing.

"The question that will, I think, confront some senators is 'Do you throw away something because you'd rather have everything?'" asked Wong. "We're building a vehicle that will take us to a low-pollution future. Some people want it to be a Ferrari, but if you can't have a Ferrari would you really have no vehicle at all?'

Australia is being urged to take a decisive stand against the potential ravages of climate change by international experts.

Leading climatologist, professor Stephen Schneider of Stanford University, believes there is no time to waste.

"Well, in the last 35 years of our doing nothing, nature has cooperated with theory and we have lots of examples of melting ice, and plants and animals changing, and fires and death rates going up from heat waves," said Schneider. "So now we're finally saying well we better do it. You know if we'd started a long time ago we'd be a lot further along with the job and we could do it easier and cheaper, but if we're going to sit there and use uncertainty as an excuse for inaction and wait another 10 or 20 years, then what we'll have to do in the future will be really radical. So, let's get on with the job now and we can do it smart."

In Canberra, the government wants to have the carbon trading program up and running by July, 2010. With opposition parties and business groups as well as environmentalists opposed to the laws in their present form, the scheme faces an uncertain future.