Australia’s Environment Minister Greg Hunt on Thursday ruled out putting any kind of price on carbon emissions after the next election, denting hopes in some quarters that the government’s safeguard mechanism might eventually be converted into a CO2 pricing policy.
Speaking to reporters, Hunt commented on Wednesday’s news that the opposition Labor party will introduce an emissions trading scheme if it wins the next election.
“Whether we talk about a carbon tax, a carbon price, an emissions trading scheme, we’ve ruled those out,” Hunt said.
While the Coalition government has always maintained it does not want to impose costs on emitters under its Direct Action Plan, some observers have speculated that the safeguard mechanism, which will be finalised by October, can easily be converted into a pricing scheme if the government finds that its post-2020 climate target will be too expensive to meet through the Emissions Reduction Fund alone.
The safeguard mechanism is intended to ensure that cuts achieved through the ERF won’t be offset by increases elsewhere in the economy.
It will set benchmarks for Australia’s 140 biggest emitters, which all release over 100,000 tonnes of CO2e each into the atmosphere every year.
But the rules outlined in the March draft of the mechanism were weak, and the government says it has no plans to impose financial penalties on companies that fail to comply.
Analysts say the current Direct Action Plan will not be sufficient for Australia to achieve cuts well beyond what it will achieve for 2020 unless spending is ramped up considerably, which is unlikely.
By firming up the safeguard mechanism, the scheme could work better to ensure CO2 emissions don’t balloon in the electricity and mining sectors, and if companies were forced to buy offsets when they miss targets, a carbon market would effectively emerge.
But Hunt’s categorical dismissal of having a carbon price Thursday is a sign that the issue may still be too toxic for the Coalition to make any sort of adjustment in its position.
The government’s intense campaign to “axe the tax” played a large role in its 2013 election victory, and it finally managed to repeal the carbon price in July last year.
When the right-wing Daily Telegraph newspaper on Wednesday ran the story on Labor planned ETS, its front page featured an image of Labor leader Bill Shorten as a zombie, crawling up from underneath the carbon tax’s tombstone – not a great indication that the scene is set for a balanced and open-minded discussion about a price on carbon.
By Stian Reklev – email@example.com