Australia Sees No Reason To Delay Carbon Plan

Date: 01-Dec-08

Country: AUSTRALIA

CANBERRA - The financial crisis was no reason to delay implementing an Australia-wide carbon trading plan, details of which will be unveiled with interim targets on Dec. 15, Australia's minister for climate change said on Friday.

The government wants carbon trading to start in July 2010 as part of its measures to fight greenhouse gas emissions.

The minister, Penny Wong, said the government would take the global economic slowdown into account with its plan for carbon trading, but said there was no reason to push back start dates.

"There will never be a right time to make the necessary transition to a lower carbon economy but what we do know is the longer we delay the plan the higher the cost," Wong told a media lunch earlier on Friday.

An interim framework unveiled in July proposes mandating 1,000 of Australia's biggest polluting companies buy emissions permits.

Carbon trading puts a market price on every tonne of carbon emitted. The government also wants to set an overall target for cutting emissions and give polluters a financial incentive to reduce output.

The government has also said consumers would receive subsidies to compensate for higher prices, particularly for energy and petrol caused by the plan.

Big businesses have warned the government against setting tough carbon reduction targets by 2020, saying the costs of carbon trading could worsen the economic slowdown and jeopardise growth.

Environmental groups have urged the government to take a tough stand, saying soft targets would do little to help address climate change globally.

Australia accounts for only about 1.5 percent of global greenhouse gas emissions, but is one of the top emitters per capita.

Australia is the world's biggest coal exporter and relies on coal for 80 percent of domestic electricity generation.

An interim blueprint for carbon trading proposed leaving agriculture, accounting for about 16 percent of Australian emissions, out of the carbon trade plans until at least 2015.

A report by Australia's Treasury deemed the carbon trading regime would have only a minimal impact on the Australian economy, cutting average per-capita growth by 0.1 percent a year between 2010 and 2050, and with only a small one-off impact on inflation.

(Reporting by James Grubel, editing by James Regan)