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AUSTRALIAN HIGH COMMISSION
OTTAWA

 MEDIA RELEASE

EMISSIONS TRADING SCHEME TO BE REINTRODUCED TO PARLIAMENT

1 February 2010

Bills to implement an Australian emissions trading scheme – the Carbon Pollution Reduction Scheme (CPRS) – are scheduled to be introduced to the Australian Parliament in the sitting period commencing on 2 February. The legislation has been rejected twice by the Senate (Upper House) on 13 August 2009 and 2 December 2009.

The voting down of the CPRS legislation in the Senate for a second time on 2 December provided the Government with a double-dissolution election trigger, which to date the Government has not exercised.

The CPRS bills to be introduced in this sitting incorporate the package of measures announced by the Government on 24 November 2009. Key elements of the package include:

• emissions-intensive, trade-exposed industries: permanently incorporating the Global Recession Buffer - which provides industries eligible for 60 per cent assistance with a 10 per cent buffer, and industries eligible for 90 per cent assistance with a 5 per cent buffer - into assistance rates. The 1.3 per cent Carbon Productivity Contribution (the amount by which assistance rates decline each year) has been retained to ensure all industries reduce their emissions.
  

• coal sector: A total of $1.5 billion in transitional assistance will be provided to the coal sector over five years. This is an increase from $750 million previously. The Government will commit $270 million to the Coal Mine Abatement Fund through the Climate Change Action Fund to assist gassy coal mines reduce emissions. In addition, the current COAG Renewable Energy Target (RET) review process will consider whether new waste coal mine gas projects should be eligible.

• voluntary action: The Government will ensure the CPRS takes into account voluntary action by households. Voluntary action by households will now allow Australia to go beyond our 2020 emissions reduction target. In addition, the CPRS will be amended to ensure that all existing and future purchases of GreenPower will be counted, and reductions in household emissions beyond a baseline will be reflected in lower future caps.

• Electricity Sector Adjustment Scheme (ESAS): An increase of $4 billion in assistance will be provided under the ESAS, increasing the total value of Australian emissions units distributed under the ESAS from $3.3 billion to $7.3 billion. A further three new measures - a Low Emissions Transition Incentive, an Energy Security Assurance Mechanism and auction deferred payment arrangements - will be introduced to maintain energy security and drive the transition to a low pollution future.

• electricity prices: A Transitional Electricity Cost Assistance Program of $1.1 billion will be established to assist medium and large manufacturing and mining businesses with CPRS-related increases in electricity prices in the early years of the scheme.

• agriculture: agricultural emissions will be excluded from the CPRS and offsets for agricultural emissions abatement will be included.

The Federal Opposition has said it does not support an emissions trading scheme or carbon tax in Australia. The Opposition’s announcement of its climate change policy is expected on 2 February and is likely to include regulatory measures related to farming practice and land management, energy efficiency, building codes and electricity generation.