Australia delays carbon trading scheme

Kevin Rudd blames recession for one-year postponement and offers deeper cut in emissions

guardian.co.uk, Tuesday 5 May 2009 17.40 BST

Australia's government has postponed taxing polluting industries by a year until 2011 because of the economic slowdown and concerns it would hurt business, the prime minister said today.
But in a bid for support from the opposition Greens party, the prime minister, Kevin Rudd, said he would seek to increase the planned carbon emissions cuts when his proposal is presented to the senate for a votenext month.
"The worst global recession since the Great Depression means we must adapt our climate change measures but not abandon them," Rudd said.
Under the revised plan, Rudd said Australia would cut more deeply into its carbon emissions by 2020 if the United Nations reaches a new pact on cutting global pollution at a summit in December in Copenhagen.
Originally, the emissions-cutting target was set at up to 15% below 2000 levels by 2020. The new target announced yesterday is 25% if the Copenhagen summit can agree on tough global targets.
Without the changes, Rudd's emissions trading scheme faced almost certain defeat by opposition lawmakers. The changes give him hope of negotiating an agreement with opposition parties in the senate, where the ruling centre-left Labor party is outnumbered by the main opposition Liberal party.
The Liberals have argued that the scheme should be delayed because of the economic slowdown. Industry groups want the scheme put off for three years.
The Greens said it would accept a 25% carbon reduction target, after earlier calling for 40%. Netting the support of the Greens plus two independent lawmakers would give the Labor-led bloc a majority.
Under the new government proposals, the price of a ton of carbon pollution would be fixed at A$10 (£4.90) for a year after the scheme goes into effect in July 2011. The number of permits, which businesses would purchase in the form of a tax, would be unlimited for the first year.
The original proposal called for the government to issue a limited number of permits to create a ton of carbon, which companies could buy and sell on a national market.
Ed Miliband, the energy and climate secretary, said: "I very much welcome Australia's more ambitious targets for 2020. This will provide significant momentum towards a global deal in Copenhagen. We need all developed countries to set ambitious targets to cut greenhouse gas emissions by 2020."