Clive has saved the furniture. If he gets his way – and he is almost certain to – the architecture of Australia’s emissions trading scheme will stay in place.
Negotiated over seven years and running to hundreds of pages, the design of Australia’s scheme was a massive intellectual effort about to be rendered useless.
Firms had already set up their accounting systems to be prepared for when the carbon price morphed into the trading scheme on July 1, 2015. Destroying it and then reviving it might have taken another decade.
Palmer senators will bring forward the start date of the scheme by 12 months, an idea put forward most recently by Labor’s Kevin Rudd, who wanted the scheme in sooner because it would be linked to the international carbon price, which is a lot lower than the present carbon tax.
Palmer’s twist is to set a carbon price of zero until such time as Australia’s major trading partners come on board with schemes of their own.
The trading partners he names are China, the US, the European Union, Japan and Korea. The EU already has a scheme. The US and China are on the way. It is far from unlikely that they all have trading schemes within a decade. When they are ready, Australia will be. It won’t need to reinvent its wheel.
And the related mechanisms will remain in place. Australia’s Climate Change Authority advises on targets and Australia’s progress in meeting them. With Palmer’s help it’ll keep doing that through the years the trading scheme is in hibernation, advising the government on whatever other means it chooses to meet its target of cutting emissions to 5 per cent below 2000 levels by 2020.
The authority has advised the government to move faster, cutting emissions by 19 per cent. Its chief is former Reserve Bank governor Bernie Fraser. Whether or not the government accepts that target, he’ll be happy to give it advice on how to meet any lesser target and to let it know if it’s falling short.
The profit-making Clean Energy Finance Corporation remains in business too. It’ll continue to lend money to worthwhile emission-reduction prospects.
Rather than frightening away private sector investors, as government ministers suggest, it brings them in by doing the due diligence and lending its endorsement to worthwhile projects. As of July 2013 it had leveraged $36 million to support projects worth $2.2 billion.
It’ll need to stay in place because renewable energy targets will remain in place as well, at least until after the 2016 election, according to Palmer. Their continued life should take few by surprise. Tony Abbott promised in the 2013 election they would stay.
Abbott will still get a lot of what he wants. The “wrecking ball” of the Australian economy will go. Two years into its life, the carbon tax will be replaced by a carbon price of zero. Energy prices will fall in July. Palmer wants a legislated guarantee that prices will fall and the Environment Minister Greg Hunt will give it to him.
Abbott’s got what he wants, and Clive has saved the furniture.