Australia backflips on CPRS leaving emphasis on voluntary action
The Australian Government has shelved plans for a carbon pollution reduction scheme, preferring to wait and see what the rest of the world might or might not do. In November last year Prime Minister Kevin Rudd said:
When you strip away all the political rhetoric, all the political excuses, there are two stark choices: action or inaction… As one of the hottest and driest continents on earth, Australia’s environment and economy will be among the hardest and fastest hit by climate change if we do not act now.
According to the Sydney Morning Herald in a story “Rudd’s ETS flip-flop sparks climate chaos“, Penny Wong, Minister for Climate Change said:
… the delay would ”make meeting our [emission reduction] targets more expensive” and that without a carbon price Australia would not meet the targets at all.
So what is to be done? All all is not lost. There is still legislation in place such as the National Greenhouse and Energy Reporting Act, enacted by the previous, conservative, Government to determine the raw baseline data upon which an emissions trading scheme might be based. The NGER requires companies who produce or consume more than a certain level of energy, or who produce more than a certain level of greenhouse gas emissions, to report their emissions (see thresholds here). This legislation came in in 2007 and the first reporting period only just ended with barely 60% of the firms that should have reported actually reporting. The fines for failure to report are in the order of $110k per default plus $11k+ per day they remain in default (and there are also clauses for civil penalties of around $200k and possible custodial sentences) and its been estimated that some $500 million in fines will be owing already based on this.
As I have said repeatedly, relying on the Government, any Government, to act in the best interests of its people is pure folly. One shining light in all of this is that Australia, historically, is an overachiever when it comes to voluntary action on climate change. Indeed Australia comprises around 5% of the world’s voluntary carbon market. Recognising this the Government will continue to push ahead with the National Carbon Offset Standard which establishes clear and unambiguous definitions for what comprises a valid carbon offset and defines ‘carbon neutrality’. This is a huge boost for voluntary action in Australia which, in the absence of a viable compliance scheme down-under is, for now, the best shot we have at making any sort of real difference.
What is certain is that the climate problem is not going to go away by itself, and the solution must be tied into an economic response. Firms caught in the NGER Act are being forced to report on their emissions and that in turn is stimulating them to then manage those emissions in anticipation of some sort of carbon price. And a price on carbon is inevitable.
”You can’t get to your targets without a cost on carbon … we have been very clear that we have to put a price on carbon,” said Minister Wong [yesterday].
If your firm is smaller than that required to report under NGER you are still almost certainly going to find yourself supplying goods and services to one or more of those NGER firms. These firms are typically instituting green procurement policies anyway and so there is a trickle-down effect in reporting.
No matter the Government’s inaction, Australian Business has an opportunity to embrace voluntary action and prepare itself for the time when carbon is properly priced.
To express your personal displeasure at the Australian Government’s back-flip, check out GetUp Australia. — DS