Australia's Gillard Is Under Fire for Reneging on Climate Control Pledges
July 19 (Bloomberg) -- Amanda McCluskey, head of sustainability and responsible investment at Colonial First State Global Asset Management, talks with Bloomberg's Susan Li about Australia's Aug. 21 election, and its implications for the government's policy on climate change and investors. A plan to tackle climate change will be released during the election campaign and the commitment to reconsider carbon-trading plans at the end of 2012 still stands, Gillard told Australian Broadcasting Corp. radio today.(Source: Bloomberg)
Australian Prime Minister Julia Gillard will delay charging companies for pollution, drawing criticism for reneging on a policy pledge that got Labor elected.
“We gave Labor a mandate to take climate action three years ago,” protest spokesman Bradley Smith, a member of the Six Degrees climate action group, said in an e-mailed statement. “What she announced today is just another delay tactic.”
Labor, if re-elected at next month’s election, will set up a market mechanism to put a price on carbon after 2012, establish emission standards for new coal-fired power stations and pay A$1 billion ($894 million) to connect renewable energy sources to the nation’s power grid, Gillard said a speech today in Brisbane at the University of Queensland.
“The most important thing for markets is certainty, which we’re unlikely to get until 2013,” said Stephen Halmarick, who helps manage about $135 billion as head of investment markets research at Colonial First State Global Asset Management in Sydney. “Having a market mechanism that puts a price on carbon is the way to go. The price gets to a level that makes people change their behavior.”
Gillard replaced Kevin Rudd as leader on June 24 after a slump in support to election-losing levels sparked by his move in April to shelve carbon-trading, the mainstay of the 2007 campaign, and a mining tax that caused a standoff with companies.
Policy Nonsense
“The government’s policy as it stands is a nonsense,” Greens party climate spokeswoman Senator Christine Milne told reporters in Canberra today. “China has said it intends to move on a carbon price in the next five years, so Australia is being increasingly left behind.”
The Greens, who could hold the balance of power in the upper house Senate after the Aug. 21 election, want the price set now. Gillard “intends to have the community talk under wet cement for the next three years while she does nothing on climate change,” Milne said.
“It’s high time that the prime minister show some real leadership on this, not fudge the issue until after the election,” Tony Abbott, leader of the main opposition coalition, which opposes any form of carbon tax, told reporters in Perth. “Gillard looks very much like the man she deposed.”
Labor, leading the coalition in opinion polls, is committed to cutting greenhouse emissions by 5 percent by 2020 and would source 20 percent of the nation’s power from renewable sources in the same period, Gillard said during the speech interrupted by hecklers.
Polluters Pay
“The principle is that the biggest polluters should pay,” Gillard said. “We have not abandoned our commitment to take action on climate change.”
Under Gillard’s plan, all new coal-fired power stations would have to meet new regulations on emissions standards and have carbon capture and storage mechanisms ready. Existing coal- fired plants will also be required to reduce gas emissions.
Companies that reduce emissions before a trading plan will also be rewarded when the system goes into effect, Gillard said, without providing details. Australia is the world’s biggest coal shipper and driest inhabited continent.
Gillard’s proposal is “completely meaningless,” Richard Denniss, executive director of the Australia Institute at the Canberra-based Australian National University, told ABC radio today. “The economy can handle a price on carbon.”
Rudd’s climate plan would have taxed companies with high emissions, such as energy, steel and cement makers, and offset the charges with free emissions permits and financial compensation. The assistance package would have cost the government A$20 billion, the Grattan Institute, a Melbourne- based think-tank, said in a report on April 22.
Citizens’ Assembly
Gillard said her government’s market-based system to make polluters pay will be based on Rudd’s plan. Labor will also set up a Climate Change Commission and a citizens’ assembly made up of “ordinary Australians,” to build support for action on climate change, she added.
“We already have a citizens’ assembly,” said Abbott. “It’s called parliament.”
To contact the reporters on this story: Marion Rae in Canberra at mrae3@bloomberg.net;
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