The debate over pricing carbon has been reignited after the Government confirmed introducing a carbon price for power companies would be considered as part of a climate change review.

It's a politically touchy topic — the ousting of Malcolm Turnbull as opposition leader in 2009 and Kevin Rudd as prime minister in 2010 can both be attributed in part to positions on emissions trading schemes (ETS). It's also a topic with a long history. Former prime minister John Howard first floated the idea of an ETS in 2007. Here are the five things you need to know if you want to join the conversation.

The Government says it's not talking about another carbon tax, but another way to reduce emissions.

Environment and Energy Minister Josh Frydenberg announced the terms of reference for a review of climate changes policies, to be undertaken and completed next year. Mr Frydenberg said there was potential for an "emissions intensity scheme", where power generators could pay for emissions above a set level. It sounds similar to a standard ETS, where the government caps total emissions and issues permits to emit up to that amount. Mr Frydenberg has promised any changes would ensure power prices don't skyrocket for consumers and that the "lights will remain on", as part of a shift towards a reduction in emissions.

But it does all sound very familiar.

The carbon tax introduced by the former Gillard government — and scrapped by Tony Abbott — was a scheme that covered the entire economy. The new proposal being discussed by the Federal Government would apply to individual sectors. It all hinges on what penalties would be faced by power generators when their emissions go above that set level. There's no legislation before Parliament and no guarantees anything at all will be adopted.

The Coalition was responsible for axing the carbon tax.

The former Abbott government was responsible for the repeal of the tax in 2014 after the legislation was initially blocked by the Upper House. It followed an election campaign on the issue with Mr Abbott vowing to have the repeal legislation before Parliament within 100 days of his victory. You may remember him talking out against the tax in 2011, when he made headlines for addressing a rally in front of a "ditch the witch" placard.

But that was under Abbott, who rolled Turnbull over climate change in 2009.

Mr Turnbull was ousted as Liberal leader in 2009 after a lengthy brawl over climate change policy. His support for then prime minister Kevin Rudd's amended ETS led to weeks of division within the Coalition. Mr Abbott, who won the leadership spill by one vote, withdrew the party's support for the scheme and said a Coalition policy would not involve any new taxes.

Abbott instead introduced Direct Action.

And that's what we have in place now. Instead of a tax, Direct Action provides financial incentives for polluters to reduce emissions though the Emissions Reduction Fund. It also included the creation of the Green Army, an employment program for young people. It is reported to be axed in the near future. Mr Turnbull refused to confirm the reports today, but said the review into climate change policies was "nothing remarkable".

 

Source: http://www.abc.net.au/news/2016-12-05/the-carbon-pricing-debate-explained/8092506

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