Climate Change


SOUND BASIS FOR NATIONAL DEBATE – DRAFT ENERGY WHITE PAPER

The draft Energy White Paper released today provides a sound basis for a much-needed national debate about the future of energy policy. The draft White Paper recognises the fundamental role that coal and uranium will continue to play in Australia?s export profile over the next three decades, points to the importance of policy neutrality and vibrant markets in energy policy, proposes a regular review process to monitor the impact of policy measures and recommends the streamlining or removal of costly and ineffective ?non-complementary? measures adopted by Federal, State and Territory Governments.

CLIMATE POLICY COLLAPSE HIGHLIGHTS NEED FOR RE-THINK ON CARBON TAX

Reports that there will be no global climate treaty before 2020 confirm that Australia will be paying the world?s biggest carbon tax for no environmental gain. The reports coincide with analysis from global investment bank UBS forecasting that the European carbon price could plummet to just 3 Euros in 2012. That means that Australian business could be paying a carbon price 4 to 5 times higher than their European counterparts in 2012, while their competitors in the US, Canada and other developed nations face no direct carbon costs.

PASSAGE OF THE CARBON TAX LEGISLATION

The passage of the world?s biggest carbon tax legislation through the Senate today is a missed opportunity to get the design of the scheme right. It is profoundly disappointing that the Federal Government has failed to harness the business sector?s determination to act on climate change with a scheme that simply imposes significant new costs on the economy for no environmental gain.

THE ECONOMIC IMPACT OF THE CARBON PRICING SCHEME

The MCA commissioned the Centre of International Economics to evaluate the economic costs of the proposed carbon pricing scheme in the (likely) event that action on climate change by other nations is patchy and fragmented. The study seeks to address one of the critical shortcomings in the Treasury modelling, namely the framing of its analysis around a single, highly optimistic scenario that assumes comprehensive global action by as early as 2016. The Treasury analysis also assumed that a world price on carbon will emerge by 2016 (through some unstated means) and that major developing nations would produce more emissions cuts than necessary in order to sell abatement to developed countries.

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