Green Light to Green Paper but Devil Remains in the Detail

The federal government’s emissions trading green paper is the important starting point for discussions about Australia’s contribution a lower-emissions future, BCA President Greig Gailey said.

“A long-term solution to climate change will involve the transition from a high- to a low-emissions global economy. No-one should be under any illusion about the enormity of the task or about the availability of a quick fix,” Mr Gailey said.

“Getting the design right for an Australian emissions trading scheme is critical in terms of Australia achieving emissions reductions and to our economic future. This task is all the harder in the absence of a global response.

“The debate is no longer around whether we should reduce global emissions, but rather, what cost we are prepared to bear within Australia in striving to cut global emissions.

“Unless we put in place a system that supports sustained economic growth and provides an environment for business to invest in a lower-emissions future, our emissions goals will not be met,” he said.

“The green paper provides the basis for ongoing discussions with the government, but the devil remains in the detail in terms of whether the options put forward will achieve the twin objectives of sustaining growth while meaningfully reducing emissions.”

During the consultation period over the next few months the BCA will seek to ensure the government’s final position on the design of an emissions trading scheme:

  • fully addresses competiveness and carbon leakage issues related to industries that are trade-exposed and emissions-intensive (TEEIs);
  • ensures the potential for growth in the TEEIs industries in coming decades is not eroded in the absence of a global price; and
  • ensures the ongoing reliability of electricity supply by managing the impacts of an emissions trading scheme on investment decisions.

The emissions trading scheme should achieve a market response that ensures increased use of existing and emerging low-emission and renewable energy sources, continued investment in research and development of new low-emission technologies, while encouraging greater energy efficiency across all sections of the economy,” he said.

“The green paper considers these major issues and has identified possible ways forward.

“It is essential that these now be considered and assessed to ensure that they facilitate a reduction in global emissions, prevent adverse impacts on Australia’s economic growth and promote business investment and innovation.

“The BCA is pleased to see the government has considered the impacts on electricity supply and the need for a smooth transition to less emissions intensive generation.

“The green paper discusses a number of issues related to TEEIs but the overriding concern must prevent leakage and ensure Australia’s competiveness is maintained in the absence of a global price on carbon. Approaches must be assessed in this context.

“The introduction of a national emissions trading scheme will be the most significant policy decision the Rudd Government makes. Now we must ensure we get the details right,” he said.