Changes to the Proposed Carbon Pollution Reduction Scheme

Statement from BCA President Greig Gailey

The BCA believes that global warming is a global problem and will only be solved with a global solution.  The BCA fully supports the government’s initiatives aimed at forging an effective global compact that would see all of the world’s nations placing a comparable price on carbon emissions.

The BCA believes that a target of 25 per cent emissions reduction on 2000 levels, which represents a 42 per cent per capita reduction, will be difficult for Australia to achieve, both physically and economically, by 2020 and calls on the government to honour all commitments made in relation to conditionality of targets.

The BCA continues to advocate a well-designed market-based emissions trading scheme as the least-cost way for Australia to move to a low-pollution future. Given Australia’s current economic circumstances, the BCA welcomes and supports the government’s responsible decision to delay the commencement of the CPRS by one year to 1 July 2011 to provide business with more time to prepare for the scheme and to alleviate some of the pressures currently confronting Australian business as a result of the global financial crisis.

Until such time as there is a consistent global price on carbon, recognition of the position of Australia’s emissions-intensive, trade-exposed industries is essential to ensure the preservation of Australian jobs and to avoid carbon leakage.  Businesses face substantial costs in implementing the CPRS and their competitiveness remains at risk until there is a global price on carbon.

The BCA will continue to work with government to ensure that the assistance delivered achieves the objectives of preserving jobs and avoiding carbon leakage. The BCA welcomes the government’s recognition of the need to provide Australian industry with support at the time of the scheme’s commencement to assist Australian industry to regain strength and adapt to higher energy costs and carbon emissions costs.

For the CPRS to be effective and move Australia to a low-carbon economy, certainty about the timing and details of the scheme are essential to enable individual businesses to plan and implement the necessary initiatives and investments required to enable Australia to achieve its emission targets. In the interests of business certainty, the BCA calls on the Senate to pass legislation this year to establish a Carbon Pollution Reduction Scheme, including the package of measures announced today.

The implementation of the CPRS constitutes the most significant economic decision since the floating of the Australian currency and the BCA continues to believe that it is one that should receive bipartisan support.  The BCA calls on all political parties to come together to discuss and resolve their differences on this important issue and  agree on a policy framework which delivers the long-term certainty that is essential for Australia to successfully address the climate change challenge.