Скачать презентацию Examining the Australian climate change regime Carbon pricing Скачать презентацию Examining the Australian climate change regime Carbon pricing

1b9d08b23120cafd452465ed0fce34e6.ppt

  • Количество слайдов: 22

Examining the Australian climate change regime: Carbon pricing scheme and direct action plan Dr Examining the Australian climate change regime: Carbon pricing scheme and direct action plan Dr Evgeny Guglyuvatyy 8 th International Scientific Conference on Energy and Climate Change, Athens

Climate change policy in Australia Climate change issue was on agenda in Australia since Climate change policy in Australia Climate change issue was on agenda in Australia since late 80 th. In 1989, before the 1990 Australian federal elections both leading political parties discussed introduction of GHG reduction policy. The Labor Party in particular considered GHG emissions reduction target of 20 percent by 2005. The Liberal Party was developing similar policies. However, the interest to climate change issues has dissipated during 90 th. Environmental issues were gradually dropped and did not appear in the 1993 election campaign. 2

Climate change policy in Australia Despite deteriorated attention to environmental issues in early 90 Climate change policy in Australia Despite deteriorated attention to environmental issues in early 90 th, a range of measures aimed to reduce Australia’s greenhouse gas emissions have been on agenda at the Federal and State level for last decades. Successive Australian governments have been committed to the introduction of carbon tax or emissions trading scheme (ETS) designed to mitigate climate change. There has been some experience with the deployment of ETSs in Australia. At a sub-national level, for instance, the NSW Greenhouse Gas Abatement Scheme (GGAS) commenced in 1997 and became mandatory in 2003. 3

Carbon Pricing Scheme The Gillard government in 2010 announced its intention to propose a Carbon Pricing Scheme The Gillard government in 2010 announced its intention to propose a temporary carbon pricing scheme. The Multi-Party Climate Change Committee consisting of members of the federal government and senators was set up. The Committee’s intention was to establish a climate change framework outlining the broad architecture for a carbon price. The Committee issued eleven policy principles designed to provide a consistent basis for the deliberations on a carbon price 4

Carbon Pricing Scheme Environmental effectiveness Economic efficiency Budget neutrality Competitiveness of Australian industries Energy Carbon Pricing Scheme Environmental effectiveness Economic efficiency Budget neutrality Competitiveness of Australian industries Energy security Investment certainty Fairness Flexibility Administrative simplicity Clear accountabilities To supports Australia’s international objectives and obligations 5

Carbon Pricing Scheme The carbon price scheme (the scheme) operates from 1 July 2012 Carbon Pricing Scheme The carbon price scheme (the scheme) operates from 1 July 2012 as a temporary measure designed to reduce greenhouse gases (GHG). The carbon price is $23 for the 2012– 13 financial year and increases by 2. 5 per cent in each of the following two years. Under the scheme, liable entities buy and surrender carbon units equal to their direct emissions (based on historic levels) of carbon dioxide equivalents (CO 2). Failure to surrender necessary carbon units will result in a fine. After the transitional period, the carbon price mechanism converts to a cap-and-trade ETS supplying a flexible carbon price. From 1 July 2015, the carbon units will be auctioned. Hence, even though the carbon pricing mechanism is sometimes labelled a ‘carbon tax’, the Gillard Government was committed to emissions trading. 6

Carbon Pricing Scheme The broad architecture of the implemented carbon price scheme seems to Carbon Pricing Scheme The broad architecture of the implemented carbon price scheme seems to resemble in some aspects the design of the emissions trading scheme introduced by previous government. Compensation for affected industry is a temporary measure and based on historic emissions levels, thus the incentive to reduce emissions is not eroded. The assistance package for households is designed to compensate low and medium income earners rather than high income earners. The legislation does not seem to reflect some of these criteria adequately 7

Carbon Pricing Scheme The scheme covers around 500 entities which emit 25, 000 tonnes Carbon Pricing Scheme The scheme covers around 500 entities which emit 25, 000 tonnes of CO 2 per year or more and certain waste facilities emitting more than 10, 000 tonnes per year, constituting about 50 per cent of Australia’s GHG. Agriculture and transport fuels are excluded from the scheme, although transport fuels used by off-road heavy vehicles (except for agriculture, fishing and forestry) are covered indirectly by a reduction in existing fuel tax concessions. 8

Carbon Pricing Scheme There was no cap on emissions during the fixed price period Carbon Pricing Scheme There was no cap on emissions during the fixed price period and the number of carbon units is unlimited. Starting from 2015– 16, the Climate Change Authority was supposed to set a cap on emissions taking into consideration international and Australian emissions reduction targets. Australia was committed to reducing emissions by 5 per cent of 2000 emissions levels by 2020, and by 80 per cent of 2000 levels by 2050. 9

Carbon Pricing Scheme It was projected that the carbon price scheme will raise $24. Carbon Pricing Scheme It was projected that the carbon price scheme will raise $24. 5 billion over its first four years. However, it will not be revenue neutral; the budget deficit is expected to be around $4 billion. The reason for that is an extensive spending plan to compensate industries and households and to invest in renewable energy. There are significant tax cuts and increases in allowances, payments and benefits. In particular, the tax free threshold has almost tripled from the previous $6, 000 to $18, 200 from 1 July 2012, and then increase to $19, 400 from 1 July 1 2015. Thus, all taxpayers with an income below $80, 000 have effectively received tax cuts from 1 July 1 2012. 10

Carbon Pricing Scheme An assistance package of $9. 2 billion to be allocated over Carbon Pricing Scheme An assistance package of $9. 2 billion to be allocated over the first three years to Australian industries to eliminate competitiveness issues associated with the carbon price scheme. Most affected industries such as steel, aluminium, zinc, pulp and paper makers will acquire free permits covering about 94. 5 per cent of industry’s average carbon costs. In addition, $300 million to be assigned to the steel industry’s shift to clean energy. A coal sector jobs package at $1. 3 billion is dedicated for mines that are most affected by the carbon price. A range of supporting measures designed to encourage energy efficiency and green innovation was also introduced. 11

Carbon Pricing Scheme The Australian Government decided to propose emissions trading and prioritise economic Carbon Pricing Scheme The Australian Government decided to propose emissions trading and prioritise economic objectives. The legislation ‘is the most cost-effective and economically responsible way of reducing Australia's carbon pollution’. The Australian Government followed a general tendency to concentrate on some criteria such as costs -effectiveness of GHG emissions reduction and ignore other important criteria. 12

Carbon Pricing Scheme Moreover, the whole process of decision-making by the Committee is unclear. Carbon Pricing Scheme Moreover, the whole process of decision-making by the Committee is unclear. There was no information disclosed concerning major aspects of law-making such as what approaches have been employed to prioritise criteria and how policy options were evaluated if at all. 13

Principles (criteria) Environmental effectiveness Comments Under present settings it is unlikely that the proposed Principles (criteria) Environmental effectiveness Comments Under present settings it is unlikely that the proposed carbon policy would address this criterion. Provisional Assessment Fundamentally flawed Economic efficiency The design defects of the considered policy may significantly reduce its economic efficiency. Flawed Budget neutrality In its present status, the introduced policy is unlikely to Flawed be budget neutral. Competitiveness of Australian The carbon policy renders an extensive assistance Supported industries package to affected industries and, in three years, will provide generous international linkage, thus considerably reducing competitiveness concerns. Energy security Supplementary measures included in the carbon policy Supported package are likely to increase Australian energy security. Investment certainty The price uncertainty associated with the ETS as well as Flawed general legislative volatility significantly reduces investment certainty of the carbon policy. Fairness Since a significant part of carbon policy revenue is Supported dedicated to low-income households and energy efficiency as well as R&D measures, this principle is addressed. The proposed policy provides certain degree of flexibility Flawed but the legislative adjustment of the policy may prove to be difficult. Flexibility Administrative simplicity The policy package has a number of measures which Flawed imply complicated rules and require the creation of new institutions thus eroding the administrative simplicity principle. Clear accountabilities The considered policy is implicitly complex and non. Flawed transparent; hence it is unlikely to address this principle. Supports Australia’s international objectives and obligations The policy design is well suited to reflect this criterion. Supported

Carbon Pricing Scheme The policy designed by the Gillard government fails to address a Carbon Pricing Scheme The policy designed by the Gillard government fails to address a number of the critical principles outlined by the Multi-Party Climate Change Committee, particularly; environmental effectiveness, economic efficiency, investment certainty, administrative simplicity and clear accountabilities. The criteria that the carbon policy sustains well are competitiveness of Australian industries, fairness and Australia’s international objectives and obligations, which seems to be prioritised by politicians. As a result, the introduced carbon policy contradicts some of the critical principles which were meant to be addressed in the first place. 15

Abbott Government In September 2013, the Coalition won the federal elections leaded by Tony Abbott Government In September 2013, the Coalition won the federal elections leaded by Tony Abbot who’s attitude to climate change is quite different from previous two prime ministers. The Gillard’s Government carbon pricing legislation has been repealed by the Abbott Government in July 2014. Instead of the carbon pricing mechanism the Abbott Government has introduced Direct Action Plan. 16

Abbott Government The Direct Action Plan includes as a centerpiece the Emissions Reduction Fund Abbott Government The Direct Action Plan includes as a centerpiece the Emissions Reduction Fund (ERF) which is supposed to provide incentives for GHG reduction activities across the entire Australian economy. Under the ERF the Government will pay for projects that will reduce CO 2 emissions at minimal cost. Funding from the ERF is allocated through auctions. A range of possible projects for CO 2 reduction include: energy efficiency, cleaning up power stations, reafforestation and revegetation and/or improvement of soil carbon. Abbott government announces plan to cut emissions by 26 to 28 per cent by 2030. 17

Abbott Government Under the Direct Action Plan there are no emissions caps or instruments Abbott Government Under the Direct Action Plan there are no emissions caps or instruments that would insure that the polluters are limiting their GHG emissions. The Government issued a consultation paper on Safeguard Mechanism that will apply to facilities with direct emissions in excess of 100, 000 tonnes of CO 2 -e per year. According to the consultation Paper, the Safeguard Mechanism would cover around 140 businesses which emit around 57 percent GHG from the electricity sector however, the Safeguard Mechanism will not be in place until July 2016 at the earliest. 18

Abbott Government The important feature of the Direct Action Plan is its voluntary nature. Abbott Government The important feature of the Direct Action Plan is its voluntary nature. A voluntary carbon mechanism does not provide incentive for businesses to participate and compete for participation in ERF. The Australia Senate inquiry on the Direct Action Plan provides the following comment: ‘The committee is persuaded that the Government's Direct Action Plan and the proposed Emissions Reduction Fund are fundamentally flawed. They ignore the well-established principle of 'polluter pays', and instead propose that the Australian taxpayer should effectively subsidise big polluters. ’ 19

Abbott Government According to some commentators Tony Abbott ‘reinstates industry influence over policy. ’ Abbott Government According to some commentators Tony Abbott ‘reinstates industry influence over policy. ’ (Priest 2013) The Abbott Government did not provide details concerning the development of the Direct Action Plan. It is not clear what the basis for the introduced policy was. Successive Australian governments attempting to introduce climate change related policies were taking into consideration policy developments and proposals of previous Governments. However, the policy introduced by the Abbott Government is strikingly different to carbon pricing and/or emissions trading mechanisms favoured by former Australian Governments. 20

Principles (criteria) Environmental effectiveness Comments Provisional Assessment It is unlikely that the introduced policy Principles (criteria) Environmental effectiveness Comments Provisional Assessment It is unlikely that the introduced policy would address this Fundamentally flawed criterion. Economic efficiency The policy does not address this criterion. Budget neutrality In its present status, the introduced policy is unlikely to be budget neutral. Competitiveness of Australian The participation in Direct Action Plan is voluntary and industries polluters are paid to reduce emissions thus there are no competitiveness issues Energy security The policy does not address Australian energy security. Fundamentally flawed Supported Flawed Investment certainty The repeal of the carbon pricing scheme and introduction Fundamentally flawed of voluntary policy creates significant uncertainty for renewable energy investors Fairness Australian taxpayers are paying to polluting industries to Fundamentally flawed reduce emissions under the policy therefore, this criterion is not addressed Flexibility The proposed policy provides certain degree of flexibility Flawed but the legislative adjustment of the policy may prove to be difficult. Administrative simplicity The policy package has a number of measures which Flawed imply complicated rules and require the creation of new institutions thus eroding the administrative simplicity principle. Clear accountabilities The considered policy and non-transparent; hence it is unlikely to address this principle. Flawed Supports Australia’s international objectives and obligations The policy design is not suited to reflect this criterion. Flawed

Climate change law making in Australia In the same vein the Government neither disclosed Climate change law making in Australia In the same vein the Government neither disclosed what criteria has been used to develop the Direct Action Plan, if any, nor has it explained what criteria or principles were prioritised to establish the proposed legislation. Overall, the Direct Action Plan has been significantly criticised and it is labelled as a step backwards for Australian climate change policy. 22