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Carbon price talks set for collision

Sydney Morning Herald

Monday February 7, 2011

Phillip Coorey CHIEF POLITICAL CORRESPONDENT

THE mining giants BHP Billiton and Rio Tinto are urging corporate Australia to lobby jointly for generous compensation and transition arrangements when the government eventually puts a price on carbon.As the Greens yesterday slammed the companies as "rent seekers", the Prime Minister, Julia Gillard, put herself on a collision course with the minor party by backing the same compensation arrangements negotiated as part of the Rudd government's failed emissions trading scheme."A lot of work was done by policy-makers in collaboration with stakeholders to design the various elements of the carbon pollution reduction scheme," Ms Gillard said."It's not my intention to throw all of that work out of the door. A lot of good work was done ... about how to assist industry with the transition."Generous transitional and compensation arrangements for big polluters, worth $35 billion in the first 12 months, were a key reason the Greens used their Senate numbers to defeat the passage of the Rudd government's ETS.The government's key climate-change adviser, Ross Garnaut, backs only limited compensation for industry and none for power generators.The government is renegotiating with the Greens through the Multi-Party Committee on Climate Change with the aim of agreeing to a mechanism for pricing carbon by the end of this year.To contribute to its own input, the government has appointed a business roundtable comprised of executives from about 20 of the nation's largest corporations including the big miners, Qantas, Woolworths, Shell, energy companies and the National Australia Bank.The Treasurer, Wayne Swan, is scheduled to meet the roundtable again on Friday. A source familiar with the roundtable's operations said BHP and Rio lobbyists have been contacting the other members in recent weeks urging them to dig in and present a united front on compensation.The source said there was a general acceptance among business and industry there would be a price on carbon and that they should hold out as a minimum for the same compensation arrangements negotiated in the ETS.The Greens senator Christine Milne, said the Greens would not accept these and Ms Gillard should remember the Greens, the independents and Professor Garnaut "all took a dim view of the rent-seeking that characterised the CPRS".She said the Greens would put forward suggestions based on solid economic and environmental principles, compensating trade-exposed industries for no more than their trade exposure and designing a package that drives transformation in the economy instead of holding it back."The 'hard work' that went into designing the industry package that the Parliament rejected twice, on the other hand, is best described as 'the squeaky wheel gets the oil'."It's reasonable to assume that won't pass muster with a committee focused on getting the best result for the community and the planet."The other looming area of disagreement for the Greens and the government is the starting price for a tonne of carbon.

© 2011 Sydney Morning Herald

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http://www.mechanics.com.au/mechanics-articles/2011/2/7/carbon-price-talks-set-for-collision/