The failure of the emissions trading legislation to pass the Senate today provides the Australian Parliament with an opportunity to design a carbon pricing scheme that reduces emissions, supports new technologies and protects the competitiveness of Australia’s export sectors.     

The Government’s Carbon Pollution Reduction Scheme failed to meet these three critical criteria.     

It was not linked to the development of a global protocol, with Australian firms paying billions of dollars in carbon costs from 1 July 2011 while their competitors faced no such costs.     

Despite costing the Australian economy at least $120 billion to 2020, not a single cent of this tax take was devoted to the development of new low emissions technologies. Instead, the scheme would have cost thousands of jobs and billions of dollars of investment in regional and remote Australia, while failing to materially reduce global greenhouse gas levels.     

Around 90 per cent of Australia’s minerals exports would have paid billions of dollars in carbon costs while their competitors – even in Europe and the United States - faced no such costs.     

There is a better way. Throughout the debate on the CPRS, the Minerals Council of Australia advocated a measured transition to a low-carbon economy with a scheme that is calibrated with global efforts to reduce emissions and the deployment of new technology to reduce greenhouse gases.     

The Minerals Council of Australia sector put forward a single change to the CPRS, namely a phased approach to the auctioning of permits. This approach is similar to the approaches implemented or proposed around the world – in the European Union, the United States and New Zealand.     

The MCA remains committed to the development of a climate change policy that puts a price on carbon, promotes low emissions technology, drives a global protocol that includes all major emitters and includes a complete mix of low-emissions energy sources.     

Australia has both a responsibility and self interest in taking a leadership role in the international climate change debate. It is critical that the example we set is one that others can and will want to follow. If Australia adopts a poorly designed scheme, the economic impact will be dire and no-one will follow our lead.     

On the other hand, if Australian can demonstrate that it is possible to make the transition to a lower emissions economy without forsaking jobs, international competitiveness and living standards, other nations will be more likely to follow our example.