In responding to the announcement today of the federal government’s proposed climate change framework, the Business Council of Australia restates the important principles that should apply to the development of specific policies in coming months.

Those principles are that any policies to reduce greenhouse gas emissions should enable least-cost emissions reduction, and include a market-based mechanism as the primary vehicle to reduce emissions.

Policies should also enable a smooth transition for the electricity sector that maintains viability and reliability of supply, and ensure that our emissions-intensive and trade-exposed industries are not disadvantaged in the absence of a global price on carbon.

In relation to today’s announcement, until details such as the scale of the fixed price, the criteria for moving to emissions trading and the transition and implementation arrangements are known, business will not be in a position to evaluate what is proposed, nor will it be given any greater certainty for future investment.

It is already concerning to see in today’s proposed framework that there would be no international offsets during the period in which a fixed carbon price will be applied.

The BCA looks forward to continuing to be involved in consultation with the government and all parties in the development of the final details for policies to reduce greenhouse gas emissions.