Australia to unveil carbon price scheme this week

Reuters News
Posted: Jul 03, 2011 8:28 PM
Australia to unveil carbon price scheme this week

CANBERRA (Reuters) - An Australian carbon price scheme putting a tax on emissions and outlining a transition to emissions trading around 2015 will be unveiled later this week, the deputy leader of the influential Greens Party said on Monday.

Christine Milne also backed reports that the minority Labor government had agreed to set-up a multi-billion dollar fund to aid renewable energy investment under the scheme, helping counter a promised exemption for petrol opposed by the Greens.

Uncertainty over the fate of the policy, which would tax carbon emissions from next year, has begun to frustrate investment decisions, particularly in the coal-fired power industry and in renewable energy and plantation forestry.

"Certainly we have pushed not only for an emissions trading scheme, but a broad package, and that will be released later in the week," Christine Milne told Australian television.

The minority Labor government wants to impose a tax on carbon emissions from mid-2012 before transitioning to a carbon-trading system, under which the nation's 1,000 biggest polluters will need to buy carbon permits on an open market.

If agreed by parliament later this year, the emissions market would be only the second national scheme outside Europe, following the lead of neighboring New Zealand.

Negotiations have been underway for months on the scheme with two independent lawmakers, who back Prime Minister Julia Gillard in the lower house, and the Greens, who control upper house Senate balance of power.

A plan to cut carbon emissions foundered in 2009 in the face of Senate opposition from the Greens, who argued a targeted emissions cut of 5 percent by 2020 from 2000 levels was too weak.

Gillard, whose popularity has fallen to record lows due to public fears about a carbon cost driving up prices, promised on Sunday that petrol would be exempt for most motorists, hoping to neutralize a major worry for voters.

One of the independents, Tony Windsor, said he would not have supported a carbon price scheme before the parliament that increased petrol costs for people living in country areas like his own rural electorate.

The Sydney Morning Herald newspaper said Monday that the Greens had negotiated a fund to invest in renewable energy which will be paid for from the proceeds of pricing carbon and worth up to A$2 billion a year.

"What we've said is there needs to be a package that has in it an emissions trading scheme, but also has a range of complementary measures, because we know that the carbon price won't be high enough to drive the roll-out of large-scale renewables (projects) in the timeframe that we need them," Milne said.

Treasurer Wayne Swan is expected to release economic modeling this week showing that a price on carbon pollution would reform the economy at a modest cost, despite Australia being one of the biggest per-capita greenhouse emitters.

The government is aiming to bring legislation for the scheme into the lower House of Representatives in August, with a vote in the Senate expected around October or November.

(Reporting by Rob Taylor; Editing by Ed Davies)