Extract from The Guardian
Repeal could cost $20bn over next four years and 59 economists insist a carbon price is the best way to reduce emissions
Supporters of emissions trading are making a last-ditch plea to the
Senate not to repeal Australia’s laws – citing new analysis that shows
“axing the tax” will cost the budget almost $20bn over the next four
years and a letter from 59 leading economists insisting a carbon price
is the best way to reduce emissions.
But the government is determined the carbon price repeal should be the first decision of the new Senate and, with the support of the Palmer United party (PUP), appears set to bring on the debate and finally achieve the tax’s repeal this week.
Agreement is close on the one amendment the PUP insists on – to guarantee that cost reductions are passed through to consumers. Meanwhile the PUP is preparing to introduce its own version of an emissions trading scheme this week with the price temporarily set at zero until trading partners act.
A costing by the parliamentary budget office has found budget revenues would be $18.1bn higher over the next four years if the carbon price was retained.
The costings, requested by the Greens, found that if the government also stopped paying compensation in the form of free permits to the coal industry, the budget benefit would be $20.2bn.
The Greens leader, Christine Milne, said the costings showed “the government is claiming a budget emergency, but it is preparing to forgo $18bn to help out the big polluters”.
At the same time a group of 59 economists, led by the former Liberal leader John Hewson, has appealed to the Senate not to repeal carbon pricing.
“We are writing this open letter as a group of concerned economists with a broad range of personal political views, but united in the judgment that a well-designed mechanism that puts a price and limit on carbon pollution is the most economically efficient way to reduce carbon emissions that cause global warming,” the economists wrote to all MPs and senators.
“Such a mechanism is a necessary and desirable structural reform of the Australian economy, designed to change relative prices in a way that provides an effective incentive to consumers and producers to shift over time to more low-carbon, energy-efficient patterns of consumption and production.”
After lengthy negotiations with the PUP leader, Clive Palmer, over his party’s single demand for its three Senate votes in favour of repeal – an amendment to ensure power price reductions are passed on to consumers – the environment minister, Greg Hunt, was confident the repeal would succeed. Repeal is also backed by incoming Family First senator Bob Day, Liberal Democrat senator David Leyonhjelm and DLP senator John Madigan.
Hunt said he had spoken to Palmer three times in the past week and had continued “extremely constructive” discussions with PUP representatives over the weekend.
“We will add additional legislative safeguards and guarantees that all of the savings from the carbon tax will go back to consumers,” Hunt told Sky News on Sunday.
“We will, with the cooperation of the crossbenchers, I trust and I hope, bring those bills back. We're not going to delay. We will bring them out of committee where the ALP is trying to keep them and we will work with the Senate tomorrow [Monday] and over the coming days to have the bills passed. The full savings will come back to consumers and that will be through law.”
The government has scheduled the carbon price repeal bills as the first order of business at noon on Monday, but this could trigger procedural manoeuvring on the floor of the Senate because the environment and communications legislation committee was not due to present its report on the legislation until 14 July.
The manager of government business in the Senate, Mitch Fifield, said on Friday the committee had finished its report but Labor and the Greens had refused to take part in a meeting, depriving it of the ability to table the report early. It is understood the committee is due to meet again on Monday.
Labor’s Senate leader, Penny Wong, said she hoped the crossbench would “resist the government's bullying and agree to consider bills that abolish a carbon price when they are scheduled to be debated” in line with Senate rules.
“I also hope crossbenchers will stand up for future generations of Australians by insisting the repeal of the fixed price on carbon pollution is accompanied by a floating price in the form of an emissions trading scheme,” she said.
But Palmer told Guardian Australia on Sunday: “We will support the government’s motion to bring the carbon tax out of committee to a vote tomorrow.”
The Motoring Enthusiast Party senator Ricky Muir said through a spokesman: “While I am not going to disclose how I will vote at this stage, I feel reasonably confident that the carbon tax will be repealed. I don’t believe that the crossbench will obstruct the debate.”
The prime minister, Tony Abbott, said the Coalition had “fought hard to scrap this toxic tax” and expected the Senate to vote on repeal this week.
Less certain is the fate of the government’s alternative “Direct Action” plan, which is opposed by almost all the crossbench senators.
The government has already appropriated the money for the competitive grants program, but would not be able to implement the safeguards and standards for the scheme without legislation.
PUP will also seek to insert a new “zero-rated” emissions trading scheme into a separate bill to repeal the climate change authority and will also seek to stop that body’s abolition. This move could win support from Labor, the Greens and the independent senator Nick Xenophon, but negotiations are not finalised.
The Climate Institute think-tank said repeal of Australia’s carbon laws would be “a shattering and historic loss to credible climate policy”, describing the existing system as the only available plan that “comes within cooee of credible climate policy”.
“Repeal of the carbon laws will usher in a new era of regulatory and community volatility that will institutionalise uncertainty and instability for carbon-intensive business and those businesses that rely on them,” said John Connor, chief executive of the Climate Institute.
“The sooner stable, long-term and effective policy is in place, the sooner our prosperity is on a safer path and Australia can help rather than hinder global climate change action.”
Connor said the government’s planned emissions reduction fund in its current shape was not “a credible, sustainable or effective climate policy” and the “safeguard mechanisms” as currently proposed would not deliver binding limits on emissions.
But the government is determined the carbon price repeal should be the first decision of the new Senate and, with the support of the Palmer United party (PUP), appears set to bring on the debate and finally achieve the tax’s repeal this week.
Agreement is close on the one amendment the PUP insists on – to guarantee that cost reductions are passed through to consumers. Meanwhile the PUP is preparing to introduce its own version of an emissions trading scheme this week with the price temporarily set at zero until trading partners act.
A costing by the parliamentary budget office has found budget revenues would be $18.1bn higher over the next four years if the carbon price was retained.
The costings, requested by the Greens, found that if the government also stopped paying compensation in the form of free permits to the coal industry, the budget benefit would be $20.2bn.
The Greens leader, Christine Milne, said the costings showed “the government is claiming a budget emergency, but it is preparing to forgo $18bn to help out the big polluters”.
At the same time a group of 59 economists, led by the former Liberal leader John Hewson, has appealed to the Senate not to repeal carbon pricing.
“We are writing this open letter as a group of concerned economists with a broad range of personal political views, but united in the judgment that a well-designed mechanism that puts a price and limit on carbon pollution is the most economically efficient way to reduce carbon emissions that cause global warming,” the economists wrote to all MPs and senators.
“Such a mechanism is a necessary and desirable structural reform of the Australian economy, designed to change relative prices in a way that provides an effective incentive to consumers and producers to shift over time to more low-carbon, energy-efficient patterns of consumption and production.”
After lengthy negotiations with the PUP leader, Clive Palmer, over his party’s single demand for its three Senate votes in favour of repeal – an amendment to ensure power price reductions are passed on to consumers – the environment minister, Greg Hunt, was confident the repeal would succeed. Repeal is also backed by incoming Family First senator Bob Day, Liberal Democrat senator David Leyonhjelm and DLP senator John Madigan.
Hunt said he had spoken to Palmer three times in the past week and had continued “extremely constructive” discussions with PUP representatives over the weekend.
“We will add additional legislative safeguards and guarantees that all of the savings from the carbon tax will go back to consumers,” Hunt told Sky News on Sunday.
“We will, with the cooperation of the crossbenchers, I trust and I hope, bring those bills back. We're not going to delay. We will bring them out of committee where the ALP is trying to keep them and we will work with the Senate tomorrow [Monday] and over the coming days to have the bills passed. The full savings will come back to consumers and that will be through law.”
The government has scheduled the carbon price repeal bills as the first order of business at noon on Monday, but this could trigger procedural manoeuvring on the floor of the Senate because the environment and communications legislation committee was not due to present its report on the legislation until 14 July.
The manager of government business in the Senate, Mitch Fifield, said on Friday the committee had finished its report but Labor and the Greens had refused to take part in a meeting, depriving it of the ability to table the report early. It is understood the committee is due to meet again on Monday.
Labor’s Senate leader, Penny Wong, said she hoped the crossbench would “resist the government's bullying and agree to consider bills that abolish a carbon price when they are scheduled to be debated” in line with Senate rules.
“I also hope crossbenchers will stand up for future generations of Australians by insisting the repeal of the fixed price on carbon pollution is accompanied by a floating price in the form of an emissions trading scheme,” she said.
But Palmer told Guardian Australia on Sunday: “We will support the government’s motion to bring the carbon tax out of committee to a vote tomorrow.”
The Motoring Enthusiast Party senator Ricky Muir said through a spokesman: “While I am not going to disclose how I will vote at this stage, I feel reasonably confident that the carbon tax will be repealed. I don’t believe that the crossbench will obstruct the debate.”
The prime minister, Tony Abbott, said the Coalition had “fought hard to scrap this toxic tax” and expected the Senate to vote on repeal this week.
Less certain is the fate of the government’s alternative “Direct Action” plan, which is opposed by almost all the crossbench senators.
The government has already appropriated the money for the competitive grants program, but would not be able to implement the safeguards and standards for the scheme without legislation.
PUP will also seek to insert a new “zero-rated” emissions trading scheme into a separate bill to repeal the climate change authority and will also seek to stop that body’s abolition. This move could win support from Labor, the Greens and the independent senator Nick Xenophon, but negotiations are not finalised.
The Climate Institute think-tank said repeal of Australia’s carbon laws would be “a shattering and historic loss to credible climate policy”, describing the existing system as the only available plan that “comes within cooee of credible climate policy”.
“Repeal of the carbon laws will usher in a new era of regulatory and community volatility that will institutionalise uncertainty and instability for carbon-intensive business and those businesses that rely on them,” said John Connor, chief executive of the Climate Institute.
“The sooner stable, long-term and effective policy is in place, the sooner our prosperity is on a safer path and Australia can help rather than hinder global climate change action.”
Connor said the government’s planned emissions reduction fund in its current shape was not “a credible, sustainable or effective climate policy” and the “safeguard mechanisms” as currently proposed would not deliver binding limits on emissions.
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