Maverick politician puts Australia's CO2 emission plans in doubt

04:22 PM @ Thursday - 26 June, 2014
Australian mining magnate, and independent member of parliament, Clive Palmer Wednesday threw the federal government's plans to replace the country's carbon tax with a new emissions reduction system into disarray.

Palmer said his three Palmer United Party senators would vote with the government to repeal the carbon tax when it goes before a new-look Senate early next month.

But the multi millionaire -- accompanied by former US vice president and climate change activist Al Gore --- also said the PUP would push for an Emissions Trading System in line with world systems and retention of the country's 20% Renewable Energy targets until after the next election in 2016, according to Australian media reports Wednesday.

Palmer's decision was welcomed by Australian climate policy observers.

Rob Fowler, Melbourne-based Australia & New Zealand Representative for lobby group the International Emissions Trading Association, said Palmer's call for an ETS was a wonderful surprise, but added the conditions to establish an ETS are less clear, albeit very welcome.

"Were hoping that will crystallise into something quite useful for business and that business can work with," Fowler said by telephone. Australian Prime Minister Tony Abbott has proposed replacing the two-year old carbon tax with a Direct Action Plan, which would use tax revenues to reduce industry's carbon dioxide emissions. But Palmer opposes the scheme.

Palmer Wednesday said the PUP would introduce an amendment in the Senate to introduce a 'zero rated' emission trading scheme which would only become effective when Australia's trading partners take similar action, state broadcaster ABC reported.

Palmer, an eccentric former Liberal party stalwart who quit the right of center party in 2012, was not previously known as a proponent of action to address climate change.

In a statement later Wednesday Gore said: "Mr Palmer and I don't agree on everything, but I'm very encouraged by his willingness, and that of his party, to preserve many of the climate policies in Australia.

"While I will be disappointed if the immediate price on carbon is removed -- because it is a policy which is ultimately critical to solving the climate crisis -- I am hopeful that Australia will continue to play a global leadership role on this most pressing issue.

"An Emissions Trading Scheme, a strong Renewable Energy Target, and sound guidance from the Climate Change Authority, the Clean Energy Finance Corporation and the Australian Renewable Energy Agency are all highly effective tools in reducing carbon emissions," Gore said.

In March, Australia's upper house voted against the government's bid to repeal the former Labor government's carbon pricing mechanism and related bills to abolish the three related state bodies referred to by Gore.

Local elections have since ended the opposition Labor and Greens' majority in the Senate. As of next week the balance of power in Australia's upper house will be held by eight independent senators, six of whose votes will be needed to pass any government bills.

Palmer's decision to reject the destruction of the CEFC, RET and CCA is a victory for Australia's renewables industry, common sense and science, said Martijn Wilder, a partner at law firm Baker & McKenzie in Sydney.

"Palmer's statement makes it clear that the Direct Action Plan policy is dead, which raises questions about how the country's target for a 5% reduction in emissions by 2020, compared with 2000 levels, will be met," said Wilder by telephone.

"This leaves the government's policy in disarray," he said. "The government needs to find a way to meet the target. An ETS is the best, most efficient way of meeting that target."

A second series of carbon tax-linked legislative defeats in the Senate could trigger a double dissolution, whereby Abbott would call for both houses of parliament to be dissolved and call new elections.

Abbott won a landslide election victory in September 2013. Abolishing the carbon tax was one of his key election pledges.

But both Abbott's personal ratings and the government's poll ratings have fallen since the announcement in May of a cost cutting budget.

Environment minister Greg Hunt, responding to Palmer's statements, said in a press conference that this is unambiguously good for Australian families as the pledge to repeal the so-called carbon tax would happen.

Hunt added: "An emissions trading scheme is not our policy. We do, however, want to see any amendments, and if amendments appear, we will consider them. But it is not and has not been our policy."

Under the existing Carbon Pricing Mechanism, emitters across the economy including oil and gas companies, power generators and steel manufacturers currently face a fixed price of A$24.15/mt ($22.60/mt)of carbon dioxide equivalent emitted, rising to A$25.40 on 1 July. From 1 July 2015, it transitions to a floating price, or effectively an ETS.
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