Wednesday, June 25, 2008

We wouldn't have an emissions trading scheme without petrol

Surely not! That would be stupid. But...

The shape of Australia's planned Emissions Trading Scheme has been thrown into doubt with both the Government and the Opposition refusing to by refusing to say whether it should cover petrol.

Until this week, a broad-based scheme including transport fuels had bipartisan support.

The Opposition's environment spokesman Malcolm Turnbull yesterday disowned a pledge that he made as Environment Minister mid last year to include transport fuels saying it was a “Howard Government’s policy”

Since then petrol prices had “gone through the roof” and it had become clear that carbon prices would have to be higher than had been thought.

“Now there are a couple of ways you can deal with this. One is that you can what the Europeans have done and say we will leave liquid fuels out of the emissions trading scheme, at least at the outset. The other is that you can keep the carbon price across the board, include liquid fuels, but reduce the excise as you impose the carbon price.”

A $100 carbon price, if fully applied to petrol would add 25 cents a litre to the price.

The Climate Change Minister Penny Wong savaged Mr Turnbull for his prevarication saying that the Opposition didn't know whether it was “Arthur or Martha” and that it would need to “answer, respond and tell us what its answer is when it comes to climate change.”

But when asked by the Canberra Times whether the government would include petrol in its own scheme she three times refused to answer.

Senator Wong said first that the Government had “made it clear from the start that those decisions, including coverage, are decisions we will make in the coming months”.

They would be canvassed in a Green Paper to be released next month.

Asked again to confirm that petrol would form part of Labor's scheme she said that the Opposition in government had set out an emission trading scheme which did include petrol but were now backing away from it.

Asked a third time whether the government would include petrol in its scheme she said the Opposition was failing to live up to the task of economic responsibility.

The government's Green Paper, due late next month will take into account the findings of the draft Garnaut Climate Change Review to be released Friday week.

But the Garnaut Review, commissioned by the Prime Minister Kevin Rudd while Leader of the Opposition and conducted by the ANU economist Ross Garnaut, would be only one of many inputs into the Green Paper.

“The Green Paper will outline Government’s thinking informed by a range of matters including Professor Garnaut’s report, including advice from within the government and of course including the consultations with business, with industry that government has been undertaking,” Senator Wong said.

Professor Ross Garnaut believes that transport fuels should be included in the scheme. He told the Canberra Times earlier this month that it was “Kevin Rudd and Penny Wong’s job to decide what they can manage, but I can’t see any good reason for excluding transport.”

Senator Wong indicated yesterday that even the Green Paper might not settle the question of whether petrol would be in the scheme saying the paper would merely “give some indication of where the Government is heading so that the community and key stakeholders including industry can have their say.”

In Parliament the Infrastructure Minister Anthony Albanese appeared to lend support for including petrol in the scheme saying that the transport sector was responsible for 14 per cent of total emissions and must be a part of any climate change strategy.


National Greenhouse Gas Inventory 2006, released by Penny Wong June 24, 2008


5 comments:

neophyte said...

I notice that Greg Hunt is saying that, instead of imposing a carbon tax on fuel, the government should adopt the EU position of cleaning up vehicle emissions. I'm not sure that cleaning up emissions will have much impact on CO2 levels and, I would imagine that introducing tougher emission levels would require a lot of older vehicles to be taken off the road to be replaced by newer, cleaner ones. Who will pay for that? Surely it makes more sense to include fuel in the ETS.

Julie said...

I'm so in suspense over the issue of fuel being included in the ETS. It seems like a real indication of how seriously our government is taking the issue of climate change: if they include it over the howls from industry, we know we can expect more good/tough decisions; if they cave in on this, then how much more will they allow industry to get away with?

Nicky said...

Alan Kohler writes about an elegant solution
http://www.businessspectator.com.au/bs.nsf/Article/An-elegant-solution-FXSAD?OpenDocument

Letter said...

Letter to Editor, July 2, 2008

No cents in sums

A $100 carbon price, if fully applied to
petrol (‘‘Transport fuel pact unravels’’,
June 25, p5), would add 25c a litre to the
price, Peter Martin says. Given the
carbon content of petrol is 73 per cent
carbon and the specific gravity of petrol
is 0.737g per cubic centimetre, then
purchase of carbon credits by a fuel
company (from a business removing
carbon dioxide from the atmosphere,
eg, by geosequestration or growing new
forests) at $100 per tonne of carbon,
would cost 5.38c a litre.

This is for a zero net emissions
policy, not a 20, 50 or 80 per cent
reduction.

Could Peter Martin please explain
how 5.38c a litre increases to 25c?
Does the transport of oil to the
refinery, refining of the oil to petrol,
and transport of petrol to the service
station emit four times as much carbon
dioxide to the atmosphere as is eventually
emitted when the petrol is used in
our cars, or is there a rake-off here?

Keith Helyar, Watson

Peter said...

Hi Keith, I explain it here.

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