Even as the countries and businesses around the globe rush to embrace trading in carbon credits, major Australian industries have voiced their opposition to a government-sponsored bill that aims to cap greenhouse gas emissions beyond which buying of carbon credits would become mandatory.
Coming from the nation that is the heaviest polluter on a per-person basis, this stand is especially galling. (See: New carbon credits ratings agency launched in London)
The Business Council of Australia (BCA) released a report that said if the Australian government were to go ahead with the proposed scheme, some businesses would be forced to shut or move offshore.
The report says out of 14 businesses studied in its research, three would shut immediately, four would suffer large earnings losses exceeding 20 per cent and investments could be threatened.
The BCA doesn't like the government's proposed model and has released a scheme of its own, which would be slower, softer, and offer more protection for business. While the government wants to start emissions trading in 2010, the industries want to hold off till an international agreement on climate is signed – a remote possibility in the immediate future.
In the meantime, the BCA proposes a warm-up scheme would start, with a fixed, low carbon price of $10-$20 a tonne. When emissions trading did start, its target for emissions reduction would be "modest'' - the BCA suggests returning emissions to 2000 levels by 2020.
Companies that want to expand would be allowed to go over that target. There would be a cap on how much any company would have to pay for its carbon permits, set at three to five per cent of profits plus labour costs.
BCA president Greig Gailey held up the prospect of loss of jobs and industries if the government persisted in its stand. "Nobody wants to see these industries disappear,'' he said, "All that happens is they close and those jobs move offshore.''
However, environmentalists decried the BCA's assertions. They say that the high carbon price of $40 a tonne considered by the body in its aforementioned study was misleading and that it was trying to water down emissions trading.
Federal Climate Change Minister Penny Wong welcomed the BCA's input, but rejected any special pleading.
"As the government, we have to be very conscious that any decision to shield one sector or increase the protection to one sector will inevitably place greater costs on other parts of the community and other parts of the economy,'' senator Wong said.