Aussie climate change policy runs into rough weather

The Australian government is hardly pushing for the implementation of a key climate change policy in the face of serious opposition from both the coalition and the Greens.

The scheme is aimed at reducing greenhouse gas emissions to 5 to 15 per cent by 2020, a target that was well below the minimum 25 per cent cut called for by environment groups and the European Union.

The climate change minister, Penny Wong, asked opposition leader Malcolm Turnbull not to block the bill from coming into law this year.

"The challenge will be for Turnbull to stand up to the climate change sceptics in the coalition who do not want action taken on climate change," senator Wong said at a forum of the

Australian Business Economists in Sydney Saturday.

She said the global financial crisis was no excuse for backing away from implementing the scheme next year.

The legislation is expected to be introduced in May or June.

However, even the government's supporters demand a radical overhaul in the plan. Strategists from both the opposition and the Greens said the government's 'our way or the highway' approach was collapsing, and without big changes the emissions scheme would not pass the senate.

Accusing Turnbull of backing away from his support for a carbon emissions trading scheme, the policy's centre piece, Wong chided him saying that 'it is time for the curtain to close on Mr Turnbull's Hamlet soliloquy on climate change'.

The businesses and environment groups also remain critical of the plan. They say the scheme will threaten exports.

The Greens say the proposal is flawed and the Australia Institute think tank says it is badly designed with too many exemptions and not enough incentives.

The opposition spokesman on the environment, Greg Hunt, said the coalition supported the concept of emissions trading, but ''what we do not support is sending Australian emissions to China along with Australian jobs''.

Opposition backs carbon tax plan
Earlier in the week opposition spokesman on emissions trading, Andrew Robb, said they are ready to support a carbon tax plan instead of an emissions trading scheme.

''Andrew Robb and his sceptic friends know it is not going to happen, so it is perfectly safe for them to promote it,'' Wong responded.

Some ministers are trying to mend ways with environmentalists that were united against the scheme because of its low targets and its proposal to hand $9 billion in pollution permits to business, including big exporters.

Critics say that the government was walking a tightrope in the senate. They predicted the scheme would be delayed until after the Copenhagen climate conference in December.

However, Treasurer Wayne Swan says the government remains committed to carbon trading scheme.

''We'll take that legislation to the House of Representatives and through to the Senate from May onwards,'' he reiterated.

''We'll see whether the Liberal Party and Joe Hockey can craft a coherent policy amidst all of the confusion that reigns on their frontbench when it comes to this critical area of investment and certainty for the Australian economy,'' he said.

Some of the most prominent climate change activists - from NASA scientist James Hansen to former US vice-president Al Gore - prefer a carbon tax to a trading system. They are joined by economists, including free-market Nobel laureate Gary Becker and Harvard professor Gregory Mankiw.

Left-leaning groups such as the Earth Policy Institute, Sierra Club and the Australia Institute have a shared interest with free-market groups such as the American Enterprise Institute, the Centre for Independent Studies and the New Zealand Business Roundtable in recognising the relative merits of a tax compared with a trading system.

Analysts say a cap-and-trade is not a 'volatile financial instrument'. Carbon allowances are not derivatives; they are units of regulatory compliance that would be used by the capped sources to achieve their respective CO2 reduction requirements. The fact that carbon prices in Europe have fallen simply means that it will be less expensive for companies to comply with their carbon caps.

US the worst polluter
Australia is one of the world's worst carbon dioxide polluters per capita because of its heavy reliance on abundant coal reserves. As the driest continent after Antarctica, it is also considered one of the most vulnerable countries to climate change.

On a per capita basis, the US emits a vastly greater volume of greenhouse gases than does China. Also, the West accounts for the lion's share of greenhouse-gas emissions.

A report in 2008 by Ross Garnaut, an economist commissioned by the Australian government to investigate how Australia should respond to climate change, recommended 80 per cent target for 2050 and a 10 per cent interim target by 2020.

Canada should cut emissions by the same proportion, the United States by 81 per cent, Japan by 75 per cent and the European Union by 69 per cent, the report noted. In the interest of equalising the world's greenhouse gas emissions on a per capita basis, the report said China's level needs only to fall by 4 per cent, while India's could grow 230 per cent.