Carbon trading scheme advocated for Australia

Australia should introduce a carbon trading scheme as soon as possible, according to a draft report on climate change policy handed to the Australian government.

Rick Wilkinson
OGJ Correspondent

MELBOURNE, July 7 -- Australia should introduce a carbon trading scheme as soon as possible, according to a draft report on climate change policy handed to the Australian government.

The commissioned report, written by economist Ross Garnaut, signals the start of efforts by the new Labor government in Canberra to cut carbon emissions. It recommends a broad emissions trading scheme across industries.

Although the 600-page report stopped short of placing any hard prices on carbon omissions (and thus not quantifying the true economic impact), it did advocate that transport fuels should be included in such a scheme. It also declared that energy costs will rise and coal-powered electricity generation would not be given any compensation for having to pay a carbon tax.

However, Garnaut said it would be in Australia's best interest to learn as soon as possible whether there can be a low-emissions future for coal, and to support rapid deployment of commercially promising technologies. He suggested that $3 billion (Aus.)/year be spent on developing low emissions technology and that Australia should strive to become a market leader in this work.

Garnaut said he supports the phase out of mandatory emissions targets once a trading scheme is put in place.

The report is one of a number of inputs likely to shape the federal government's policy decisions in response to climate change.

Meanwhile the federal opposition said the government's stated 'ambition' of 2010 for the introduction of an emissions trading scheme was too early and could be economically dangerous. Australian jobs and industries needed protection in the process of developing a brand new system for the economy in dealing with climate change.

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