Australia Shelves Carbon-Trading Scheme

Aussie Prime Minister Kevin Rudd said that by 2012, when the current Kyoto deal expires, governments around the world would need to make clear their new carbon reduction commitments.

“That will provide the Australian Government at the time with a better position to assess the level of global action on climate change,” he said.

Rudd cited the Opposition decision not to support an emission trading scheme (ETS) and the slow global progress on a climate change response as key reasons for the delay, The Australian reports. The delay exposed him to charges today that he had backed away from one of the “great moral and economic challenge of our time.”

The decision follows the failure to secure a meaningful global agreement at the Copenhagen summit last year and the Obama administration's decision not to pursue an ETS.

This decision now means a Rudd government ETS will not be in place until after John Howard's proposed ETS was set to take effect from 2011. Rudd had previously described the ETS as the answer to the “great moral and economic challenge of our time” and had threatened to go to a double dissolution election on the issue.

He said today the Government's targets on greenhouse-gas emission reductions would remain unchanged and that climate change remained a key global issue.

“Climate change remains a fundamental economic environmental and moral challenge for all Australians and for all people of the world,” he said.

Rudd said Tony Abbott's alternative policy would cost more, achieve less and had not been funded.

But the opposition leader today accused Rudd of running away from climate change and called on him to outline details of his climate change policy.

Opposition treasury spokesman Joe Hockey also joined the fray, arguing the decision to shelve the controversial emissions trading scheme was a calculated “accounting trick” to improve the budget bottom line.

Hockey said under the first few years of the ETS, handouts would have exceeded the tax “so there was a cost to the budget bottom line.” Hockey said removing the ETS from the budget forward estimates contributed to an improvement of $2.5 billion over four years to the deficit.

“Postponing the scheme allows the government to remove the revenue from the sale of carbon permits of $28 billion over four years, and assistance measures of $30.5 billion, from the budget forward estimates,” he said.

“This improvement to the budget bottom line will be achieved with no effort at prudent control of spending.

Read more of this story at The Australian.