Government Invites Comment on Proposed Carbon Pricing Scheme

The Government has released its proposal for a new plan to tackle climate change by reducing carbon pollution.  The Carbon Pollution Reduction Scheme, scheduled to commence in 2010 will, for the first time, place a limit, or cap, on the amount of carbon pollution industry can emit. The Scheme will require affected businesses and industry to buy a ‘pollution permit’ for each tonne of carbon they contribute to the atmosphere, giving them a strong incentive to reduce pollution. Because the carbon pollution reduction scheme will concentrate on the biggest polluters, it will place obligations on around 1000 Australian companies in total, those that produce more than 25000 tonnes of carbon pollution each year. The Government claims it will use every cent raised by the sale of pollution permits to help Australian households and businesses adjust to the scheme and invest in clean energy options. For the first three years of the scheme, it will cut fuel taxes on a cent for cent basis to offset the initial price impact on fuel associated with the scheme’s introduction.  At the end of the three year period the Government will review this adjustment mechanism. It will also offering a range of additional assistance measures, in particular for low and middle income households, to help with adjustment costs and improve household energy efficiency. The green paper also outlines programs to assist businesses in the transition period. This assistance involves providing free permits to the most emissions-intensive trade exposed activities, some direct assistance to coal fired electricity generators, and the creation of two specific industry adjustment funds, the Climate Change Action Fund and the Electricity Sector Adjustment Scheme. The paper, along with fact sheets, summaries, details of public information sessions, information about making a submission and related publications, can be downloaded from: http://www.greenhouse.gov.au/greenpaper/report/index.html