Wednesday, July 02, 2008

ACCI input into The Garnaut Report

In two days the guiding document that kicks off the Australian Government's policy review process gets tabled. The Garnaut report on climate change will input into a white paper, and then a green paper, and I'll be blogging more about these.

I came across the Australian Chamber of Commerce and Industry (ACCI) SUBMISSION TO THE GARNAUT CLIMATE CHANGE REVIEW [25pg PDF] the other day. The ACCI open strongly in favour of an Emissions Trading System in their executive summary.

ACCI supports an ETS that is efficient, maximises participation across all industry sectors and, will include major world emitters, when possible. Furthermore, a domestic ETS must minimise compliance costs and provide measures to ensure the international competitiveness of trade exposed energy intensive businesses. This should also recognise some SME’s will face energy and transport cost increases with variable, and in some cases limited, opportunities to pass such costs onto final consumers. ACCI has previously endorsed a series of policy priorities, which form the high-level policy position of our response to climate change. This includes objectives relating to environmental outcomes, economic efficiency, Australia’s
welfare (underpinned by job security and maintaining competitiveness) and assuming a fair share of the burden.

These issues were further expanded into more detailed
policy guidelines which include:

  • Australia’s largest contribution to climate change will be through indirect measures such as technology development, rather than though direct reductions in emissions;
  • Australia can reduce its own direct emissions, however, it’s contribution to global climate change will be marginal;
  • all technologies and fuel sources must be available for abatement and not regulated out of consideration – including nuclear;
  • the broadest range of sectors must be included in an ETS;
  • all six Kyoto greenhouse gases must be included in an ETS; and
  • Australia’s high per capita emissions profile does not reflect our contribution to the stock of greenhouse gases in the atmosphere.

Back to the exec summ..

ACCI agreed with the Government that the arrangements
applying post-2012 must include commitments from large
emitters including India, China and the USA.
Any ETS should be national rather than based on multiple state schemes, this includes complimentary measures such as the Renewable Energy Target and taxation liabilities such as stamp duties.

This submission provides some detailed responses to design aspects of a proposed ETS (see section 2). In providing this response we do howerver maintain concerns about the wider impact of an ETS on the Australian Economy. In large part this concern relate to the potential economic and compliance costs that will be faced by business,
especially smaller enterprises which are less able to pass
through costs. These costs will be exacerbated where an ETS operates with very restrictive emissions targets and competitor
nations remain outside these arrangements. ACCI considers that Australia’s fuel mix can only change over a long period and irrespective of the operation of an ETS unrealistic expectations of a shift from fossil fuels to renewables or the adoption of lower emissions technologies need to be tempered.

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