The BCA has responded to an invitation to lodge a submission to the federal government on issues with the Carbon Pollution Reduction Scheme (CPRS) design of 2009, given the government’s plans to use this as a basis of its current policy deliberations for pricing greenhouse gas emissions.
In the submission, the BCA argues that the CPRS in its final form at the end of 2009 is not an appropriate scheme to come into operation in 2012. This is due to:
- the limited progress in international negotiations
- the uneven recovery of the Australian economy
- design flaws in the government’s hybrid model, including no international linkage in the fixed price period and no guarantee of international linkage in the longer term
- the unclear duration of the fixed price period and no clarity as to the likely emissions reduction target.
The submission details preferred arrangements for the electricity sector and trade-exposed industries, as well as recommendations for design details of the pricing mechanism.