Australia delays carbon trade, may toughen target

A A A

Australia's government put back its much-vaunted carbon-emissions trading scheme by a year today, bowing to industry demands for more relief amid a recession while opening the door to an even deeper long-term reduction.



Lacking the political backing to implement the world's most sweeping cap-and-trade scheme outside Europe, Prime Minister Kevin Rudd said the regime would be delayed until mid-2011, but he still aimed to push laws through parliament this year.

But the major opposition, Green opponents and a key independent senator immediately rejected Rudd's concessions as "flawed", making eventual success far from assured.

"Starting slower because of the global economic recession and finishing stronger, with the prospect of a bigger outcome for greenhouse gas reductions... we believe gets the balance right," Rudd told reporters.

The setback was not unexpected after months of hardening resistance to Rudd's plan, a cornerstone of his election platform. Some carbon industry players said the delay could help clear away uncertainty that had stymied early trade and clouded the outlook for corporate costs.

The new draft included several short-term concessions to big industry in Australia, one of the world's biggest emitters per capita: a low fixed carbon price capped for a year at A$10 ($7.36), with a transition to full market trading in July 2012; and increased elegibility for free emissions permits, including 95 percent for the heaviest export-oriented polluters.

But Rudd also left open the possibility of deeper reductions.

While maintaining his interim 2020 emissions reduction target at 5 to 15 percent below 2000 levels, he said the government could increase the cut to 25 percent if other rich nations agreed to similar reductions at Copenhagen - a measure aimed at appeasing Green party legislators who wanted tougher targets.

But his overture fell flat, with Greens negotiator Senator Christine Milne calling the delay "environmentally reckless", and party leader Bob Brown unveiling an ad campaign against Rudd's climate credentials, running ahead of elections late next year.

Key independent senator Nick Xenophon, one of two swing independent votes necessary to win passage, also rejected it as a "lame duck" when most Australian voters wanted climate action.

"The government's (scheme) is fundamentally flawed. Their model is unfixable and the changes announced today are simply window dressing."

Rudd is walking a difficult line, with business and conservatives pulling his centre-left Labor party towards a softer carbon regime, and environmentalists demanding he not undermine global climate talks in Copenhagen in December, when world governments will seek a successor to the Kyoto Protocol.

But Rudd's delay enables Australia to await the outcome of those talks before deciding whether to match tough world targets or opt for a softer target in the event of a global impasse.

US President Barack Obama's administration will likely be eyeing Australia's climate tactics as it prepares for its own Senate battle over creating a "cap-and-trade" law that would slash emissions of carbon dioxide and other greenhouse gases.

Brown said he had written to Rudd with an offer to break the Australian Senate deadlock and support the legislation if amendments made it environmentally effective.

But the new plan still falls short of Green demands for an unconditional emissions cut of 25 percent below 1990 levels by 2020, with a commitment to move to a 40 percent cut if the climate talks in Copenhagen forge a new global climate pact.

Major emitting industries and conservatives had complained the original regime start date on July 1 next year would hamper an economic recovery from a recession tipped to see 1 million unemployed by next year.

The changes will help placate companies most exposed, like flag carrier Qantas Airlines (QAN.AX), OneSteel (OST.AX) and top steelmaker Bluescope (BSL.AX), whose chairman last week attacked the emissions plan as an economic "de-stimulus".

Australian electricity futures for later in 2010 fell 12 percent as the expected price of carbon was removed (NEMMCO).

Some participants in the nascent carbon market said the delay was welcome relief after months of deepening uncertainty.

"I'm a little surprised but I suppose the good thing is at least it gets resolved... The worst outcome is continued uncertainty about what is going to happen," said Gary Cox, vice president of commodities and energy at global brokers Newedge.

Suggested Topics
News
people

Actress sees off speculation about her appearance in an amazing way

Arts and Entertainment
Serge Pizzorno of Kasabian and Noel Fielding backstage at the Teenage Cancer Trust concerts
musicKasabian and Noel Fielding attack 'boring' musicians
News
videoWatch Lynda Bellingham's tragic final Loose Women appearance
Sport
A view of today's Spanish papers
football
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment
The last great picture - Winner 'Black and White' and overall 'Wildlife Photographer of the Year'
art
News
people

Sport
nflAtlanta Falcons can't count and don't know what the UK looks like
News
i100
Arts and Entertainment
High notes, flat performance: Jake Bugg
music

Review: Despite an uphill climb to see Jake Bugg in action, his performance is notably flat

News
The Putin automaton will go on sale next month in Germany
videoMusical Putin toy showing him annexing Crimea could sell for millions
News
news

Powerful images of strays taken moments before being put down

News
i100
Arts and Entertainment
S Club 7 pose for Children in Need 2001
music
Arts and Entertainment
'Right Here' singer Jess Glynne is nominated for Best Newcomer at the MOBO Awards 2014
musicExclusive: Jess Glynne hits out at 'ridiculous' criticism of white artists nominated for Mobo Awards
Voices
'Irritatingly Disneyfied': fashion vlogger Zoella
voices

Arts and Entertainment
Russell Brand has written a book of political analysis called Revolution
books

Review: Witty banalities aside, the comedian has an authentic voice

Arts and Entertainment
Separated at birth? Frank Sivero (left) claims The Simpsons based Mafia character Louie on his Goodfellas character
arts + entsFrank Sivero sues Simpsons studio over allegedly basing mobster character on Frank Carbone
News
Carl Bernstein (left) and Bob Woodward (right) with former 'Washington Post' executive editor Ben Bradlee
people

The Washington Post editor helped Bob Woodward and Carl Bernstein bring down President Nixon

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

IT Support Analyst - London - £22,000

£20000 - £22000 per annum + Benefits: Ashdown Group: IT Support Analyst - Chel...

Learning Support Assistants-Nantwich area

£8 - £9 per hour: Randstad Education Chester: We are currently recruiting for ...

Primary Teachers-Northwich area

£85 - £110 per day: Randstad Education Chester: Primary Teachers- Northwich Ar...

Primary Teachers-Northwich area

£85 - £110 per day: Randstad Education Chester: Primary Teachers- Northwich Ar...

Day In a Page

Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Ed Sheeran hits back after being labelled too boring to headline festivals

'You need me, I don’t need you'

Ed Sheeran hits back after being labelled too boring to headline festivals
How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

How to Get Away with Murder

Shonda Rhimes reinvents the legal drama
A cup of tea is every worker's right

Hard to swallow

Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
Which animals are nearly extinct?

Which animals are nearly extinct?

Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
12 best children's shoes

Perfect for leaf-kicking: 12 best children's shoes

Find footwear perfect to keep kids' feet protected this autumn
Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

Arsenal’s ray of light ready to shine again

Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

Moyes’ show of sensitivity thrown back in his face... by Ferguson

Manchester United legend tramples on successor who resisted criticising his inheritance
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Lonely Planet’s Best in Travel 2015

UK city beats Vienna, Paris and New York to be ranked seventh in world’s best tourist destinations - but it's not London