Australia delays carbon emissions limits

By Peter Smith in Sydney
Published: May 4 2009 05:35

Australia will delay the introduction of its proposed emissions trading scheme by one year until mid-2011, bowing to industry demands for more relief amid a recession.
Canberra’s delay of an emissions trading scheme is accompanied by higher targets for carbon reductionBut it has raised the upper limit of its carbon reduction target from 15 per cent to 25 per cent per by 2020 and promised more industry support.
Climate change was a central campaign theme for Kevin Rudd when he won the 2007 election and the changes represent a turnround by the prime minister, who only months ago said a delay would be irresponsible.
The ETS will not be in operation until after Australia’s next federal election, which is likely to be held before the end of 2010.
Mr Rudd blamed the decision on the uncertainty caused by global downturn, which he said had worsened.
Business groups had lobbied Canberra to postpone the ETS’s introduction, arguing it would disadvantage Australian businesses, which are already suffering from a contracting economy, at a time when most of the country’s trading partners do not face similar burdens.
The revised timetable will give Canberra time to consider what targets are set by developed countries at the Copenhagen climate change conference this year. The aim of cutting emissions by 25 per cent by 2020 against 2000 emission levels will only be considered domestically if there is an international consensus on ambitious cuts at Copenhagen. Canberra is committed to a modest 5 per cent emissions cut.
The ETS was set to face stiff opposition in the Senate, Australia’s upper house. The Greens had argued for cuts of 40 per cent, revised on Monday to 25 per cent, and conservative opposition parties had called for the scheme to be delayed.

The ETS legislation was to be introduced to parliament next month and the government still hopes to have the laws passed this year.
Mr Rudd said the government was not acting recklessly or breaking an election promise by delaying the scheme.
He said the changes were made because of the impact of the global downturn on Australia, the need “to continue to provide maximum impetus for a strong outcome” at Copenhagen, and the need for Australian businesses to have certainty when making investment decisions.
But Malcolm Turnbull, opposition leader, called it a “humiliating backdown”.
“Only a few months ago Mr Rudd said that any delay in the start of an emissions trading scheme would be reckless and irresponsible both for the economy and the environment,” he said, adding the tinkering to a “very flawed scheme” was a panicked response.
Mr Turnbull said the changes had not convinced the opposition to support the legislation. The government must gain Senate support either from the conservative parties or the Greens and independent senators.
The Australian Industry Group, a business trade body, said the 2011 date provided businesses with more time to adjust to the regime.
Copyright The Financial Times Limited 2009