Pressure on Australia as Japan stalls plans for Warmist laws
JAPAN'S decision to postpone its plans for an ETS by 2013 has increased pressure on Julia Gillard over her goal of pricing carbon next year. The postponement has also set back efforts for a global market to cut global carbon pollution.
Opposition climate action spokesman Greg Hunt called on the Prime Minister to rule out an emissions trading scheme by New Year's Day in the wake of the Japanese move.
The decision by the world's fifth-largest greenhouse gas emitter and Australia's second-largest trading partner to postpone the scheme for a year comes after the US also stepped back from a national emissions trading scheme and as international firms remain concerned about lax pollution controls in China, which has no obligations under the Kyoto Protocol.
The Labor and Greens-backed climate change committee is looking at ways to cut carbon emissions and the Productivity Commission is examining carbon reduction regimes around the world.
Climate Change Minister Greg Combet has repeatedly argued that Australia is "locking our economy into failure" without a carbon price. Two weeks ago, he defended the Rudd government's carbon pollution reduction scheme, dumped by the former prime minister. He said it had included an emissions trading scheme that would have "provided the greatest certainty that Australia would meet its emissions reductions targets".
But, Mr Hunt said, the government's plans were "now in tatters". "First Canada, second the US and now Japan have all determined that there is a better way to cut emissions than a massive electricity tax. "The Prime Minister should drop this electricity tax before New Year's Day."
The government should look at the Coalition's approach of market-based incentives for emissions abatement, he said. "The choice for Australia is now a massive new tax or emissions reductions by focusing on our strengths."
Mr Combet has repeatedly argued that a price on carbon is an essential economic reform that will create an incentive to reduce pollution, stimulate investment in low-emission technology and provide greater certainty for business investment.
"It will also enhance our ability to influence the direction of the international climate change negotiations and provide encouragement for a binding agreement including all major emitters," Mr Combet told the Investor Group on Climate Change this month.
"We either grasp this opportunity for an orderly, planned and gradual transition, or face the later prospect of economic adjustment at greater cost and dislocation - in circumstances where other countries have taken the lead and the competitive advantage."
The Japanese government move came after pressure from business, which was concerned an ETS would add to costs and limit their ability to compete against rivals in China and India who would not face the same restrictions.
The Japanese government remains committed to levying a tax on CO2 emissions from fuel in October next year and to the expansion of a pilot plan for renewable sources of electricity.
At the global climate change meetings in Cancun, Mexico, Japan opposed extension of the Kyoto Protocol, calling it unfair because it did not include 70 per cent of the world's emissions, with top polluters China and the US absent.
Prime Minister Naoto Kan's government had planned to launch an ETS, under which companies would essentially buy and sell licences to pollute, in the fiscal year beginning April 2013 but had postponed it until at least 2014. The environment and other ministers decided to postpone the plan, saying the country would first "carefully consider it".
A carbon-trading system sets a cap on the pollutants companies can emit and then requires heavy polluters to buy credits from companies that pollute less, creating financial incentives to cut emissions