Australia reaches climate policy compromise - reports

2014-10-29 07:48
(Martin Meissner, AP)

(Martin Meissner, AP)

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Sydney - Australia's government has reached a compromise with independent senators and a key opposition party to secure support for a $2.2bn fund to cut greenhouse gas emissions, media reports said on Wednesday.

The ruling Liberal party has secured backing from the Palmer United Party (PUP) and independent senators Nick Xenophon and John Madigan, with details to be released later on Wednesday, according to the Guardian and the Australian Financial Review.

A compromise would put an end to a years-long debate on how Australia can meet its target of cutting greenhouse gas emissions to 5% below 2005 levels by 2020.

In August, the government dismantled a broad carbon pricing scheme put in place by the previous Labour government, saying it was too expensive.

Under the policy, known as the direct action plan, the government would set up a $2.2bn emissions reduction fund that would pay big polluters to cut their emissions.

According to the Guardian, the government has accepted proposals by Senator Xenophon to put in place a "safeguard mechanism" to ensure emissions in the coal-dependant nation do not rise under the new scheme.

Details of the safeguard mechanism will be panned out later, but is expected to include some form of penalty for companies that fail to meet government-set benchmarks.

But according to the reports, the government has rejected proposals to set aside $443m to buy UN-issued carbon offsets from abroad to ensure the target is met.

The Palmer United Party has backed the compromise because the government has agreed to review its plan to design an emissions trading scheme that would only enter into force when other large emitters, such as China and the United States, have similar policies in place, the Guardian reported.

The PUP backs an emissions trading scheme (ETS) for Australia, but only after one has been implemented in a host of other countries, including the United States and China.

"Today we've kept hope alive for an ETS," Clive Palmer, the mining billionaire founder of the PUP, said.

Nearly 40 nations worldwide, include the European Union, have nationwide carbon trading schemes in place, while 11 US states and seven Chinese cities and provinces have also launched markets.

The review will be finalised in January 2016, after a crucial UN climate conference in Paris where nations hope to agree on a new international climate treaty.

The review will be carried out by the Climate Change Authority (CCA), an independent body set up by the previous government to review Australia's climate targets and policies, which the government has previously sought to abolish, but now has agreed to let continue as part of the compromise.

But while the deal struck in Canberra might create some regulatory certainty for emitters, experts say it is not sufficient for Australia to meet its target.

"On its own, we project that the Emissions Reduction Fund will fall short of Australia's commitment," said Hugh Grossman, executive director at analysis firm Reputex.

The fund would only be sufficient to achieve 20 to 30% of the cuts required, he said.

Read more on:    australia  |  climate change  |  pollution  |  environment

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