Kevin Rudd’s carbon pollution reduction scheme, especially as amended to (supposedly) win the Liberals’ support, will do too little to change behaviour, reduce emissions and move us towards a low-carbon economy because it’s so weak and so many options have been closed off.
But it should be noted that:
1. Much of the excessive compensation runs for only the first five years or so. There are various points where the legislation provides for reviews of the pace of progress and the urgency of the problem we’re grappling with.
2. The scheme has focused on the unconditional target of reducing emissions by only 5 per cent, it now seems likely the global agreement to emerge from Copenhagen or a subsequent meeting will require us to lift that to the promised 15 per cent reduction.
The way the scheme works is that the higher the market-set price of carbon, the greater the incentive for households, businesses and major emitters to economise in their use of electricity or switch to lower-emissions sources of energy.
The scheme will hold the price at $10 per tonne of carbon dioxide in the first year, then allow market forces to push it higher. Treasury’s modelling of the scheme assumed prices of $20 to $25 a tonne. It’s not widely understood, however, that because the scheme is open to the unlimited purchase of carbon credits from overseas, the world price of carbon will impose an effective ceiling on the domestic price and it’s likely that a lot of overseas credits - coming from developing countries - will be purchased.
See the SMH 30th Nov 09, for the full article.