govt could delay emissions trade

They want a second term in office.


By Rob Taylor of Reuters

The Federal Government has said it could delay introduction of a planned emissions trading system expected to boost fuel and power prices, as polls showed its recent record popularity slipping.

Economist Ross Garnaut last week unveiled a model for how the trading system could operate after its planned 2010 introduction, warning climate shift could devastate Australia's fragile environment.

But NSW treasurer Michael Costa, accused Mr Garnaut of delivering a "Chicken Little" report predicting the sky could fall in on the economy and iconic tourist lures such as the Great Barrier Reef.

"We don't need Chicken Little, we need details," Mr Costa, a left-of-centre lawmaker, said.

"I think it's absurd ... to argue we should dismiss legitimate concerns about the details with broad-based and fairly generalised references to the future of the Great Barrier Reef."

The Garnaut report, which called for a two-year phase-in of the world's most comprehensive emissions trading scheme from 2010, will be matched by a government options paper on how the market might function, to be delivered later this month.

Voters, though, are already fretting over higher petrol and electricity prices the regime will inevitably bring, piling pressure on Prime Minister Kevin Rudd to limit its impact on ordinary Australians.

Poll

A Newspoll in the Australian newspaper on Monday showed support for the government was at the lowest level since last year's November election, with support slipping four percentage points to 55 per cent, while backing for conservative rivals rose by the same margin to 45 per cent.

Mr Rudd's personal approval also plummeted five points to 54 per cent, while his conservative rival was stable on 36 per cent.

Labor's Climate Change Minister and troubleshooter Penny Wong, who will shortly travel to Japan for a meeting of climate ministers from rich nations, said the government could delay the introduction of the emissions scheme to beyond 2010.

"That's the ambition, we said that before the election, we recognise we have to get moving on this. Obviously we'll listen to what people have to say, but that remains the ambition," Ms Wong told local radio.

Australia relies on coal to generate about 77 per cent of the country's electricity and is the world's biggest coal exporter, in part accounting for its position as the world's top per head emitter of greenhouse gases.

Mr Rudd has promised to combat climate change and deliver a 60 per cent reduction in greenhouse gases by 2050 as climate scientists warn the country, already the world's driest inhabited continent, is suffering accelerated climate shift.

A government report on Sunday said Australia could experience drought twice as frequently in the next 20 to 30 years, shredding agricultural production and threatening the country's place as the world's second biggest wheat exporter.

Industry critics have warned Rudd the 2010 emissions trade target may be too ambitious, while backing free permits for big polluting emitters such as electricity generators rather than a competitive auctions tipped to net up to $US19 billion.

Power generators say they will have to raise prices, while farmers and coal-miners warn of lost overseas competitiveness under emissions trading, which allow corporates to buy and sell permits to emit greenhouse gases