POSTED: 7 JULY 2008
CLIMATE CHANGE & EMISSIONS TRADING
We all seem to recognise that global warming and climate change are realities — and that something needs to be done to remedy the situation. The buzz-phrase right now is "emissions trading", but surveys show that only a small proportion of the population has any clue about what the concept means or entails. The following description comes from the independent GetUp organisation, but remember that this represents just one view:
What is an emissions trading scheme?
Before the last election, Kevin Rudd promised he would introduce an emissions trading scheme (ETS) by 2010. The emissions trading scheme is the main focus of the Garnaut Review. Under the ETS, companies will have to buy permits to emit greenhouse gases within an overall emissions target (currently the target is 60 per cent reductions by 2050 over 2000 levels) set by the Rudd Government. Those companies can trade those permits, allowing companies who pollute more to buy extra polluting power and smaller polluters to make some money from polluting less. But the overall emissions cannot exceed the government’s target. Australia’s emissions trading scheme will be designed to ensure Australia meets its target as part of a global agreement to reduce greenhouse pollution — an agreement that will make up the 2nd phase of the United Nations Kyoto Protocol.
Who is included in it and when will it start?
The Garnaut review says the ETS should be as broad as possible because the more companies and industries who have to pay, the lower the price will be. That means power companies, agriculture companies and transport companies should all be included. GetUp is campaigning for petrol to be included in the scheme. The scheme is due to start in 2010, but the Opposition and carbon-polluting industries are pushing Kevin Rudd to break this pre-election promise, and hold off the scheme until 2012.
So how will an ETS work?
To begin with, the government will need to auction emissions permits (although industry is lobbying for permits to be given away for free). Companies should have to pay for their original allocation of permits and for any they buy from other companies later on. Heavy polluters will need to buy more permits than light polluters while they work out how to cut their emissions. The Garnaut Review suggested an independent authority set up to monitor the ETS. This emissions umpire could act as a Reserve Bank for carbon, issuing extra permits to drive down the price or holding them back to prop it up, although the review says that might end up being too much trouble. The umpire would also have the power to penalise companies that exceed their allowed emissions. That would probably take the form of heavy fines. The draft review said fines would need to be big enough to make companies sit up and take notice, rather than it being cheaper to cop the penalty than cut emissions.
To read GetUp's full take on Professor Garnaut's report, CLICK HERE (this will download a PDF file of about 250kb) or visit the GetUp website.
Oz Baby Boomers welcomes submission of other views.
