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Australia Delays Climate Plan Till 2012, Rudd Says

April 27 (Bloomberg) -- Australia will shelve its carbon trading plan and assess actions taken by other nations at the end of 2012, the end date for the Kyoto accord on climate change, Prime Minister Kevin Rudd said today.

“Slow progress in the realization of global action on climate change” and opposition in the Australian parliament “inevitably mean the implementation of a carbon pollution reduction scheme in Australia will be delayed,” Rudd told reporters in Sydney in comments broadcast on Sky News.

The failure of the Carbon Pollution Reduction Scheme to cut emissions by 5 percent comes almost four months after some 190 countries were unable to agree on a binding greenhouse gas treaty at United Nations talks in Copenhagen.

Rudd’s legislation was blocked in the Senate by the Greens party and the Liberal-National coalition last year, creating a possible trigger for an early election. It also split the opposition, leading to the resignation of Liberal leader Malcolm Turnbull, who staked his position on a deal struck with Rudd last year to support the climate-change bill.

“This is really bad for Australian business because it increases the uncertainty, and it’s bad for international policy,” Warwick McKibbin, a central bank board member and director of the research school of economics at the Canberra-based Australian National University, said in a phone interview. “The problem with this whole debate in Australia is that we were fixated on targets and timetables and grandiose problems to satisfy Kyoto requirements when Kyoto is no longer relevant.”

Obama’s Legislation

President Barack Obama’s cap-and-trade legislation to limit carbon dioxide emissions that scientists have linked to climate change and set up a market in pollution allowances, similar to the European Union’s emissions-trading system, narrowly passed the U.S. House last year and stalled in the U.S. Senate.

Waiting and judging actions by other countries “before taking our decision about implementation of a carbon pollution reduction scheme” is the best way to meet this “fundamental economic and environmental” challenge, said Rudd, who must set a date for national elections within a year.

“A carbon trading scheme is the most effective and least expensive way of acting on climate change,” Rudd said, adding that Australia’s Labor government remained committed to targets on reducing greenhouse gas emissions.

Global Leadership

Rudd has “thrown away any claims to global leadership on climate action,” Greens Deputy Leader, Senator Christine Milne, said in an e-mailed statement. “Today’s decision can only hold back global talks.”

Rudd’s climate plan would have taxed companies with high emissions like 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 ($18.5 billion), the Grattan Institute, a Melbourne-based think-tank, said in a report on April 22.

Countries should be committing to a carbon price, not a target for emission cuts, McKibbin said.

“It’s all about managing risk and the policy makers, for some reason, don’t understand that,” he said.

To contact the reporter on this story: Marion Rae in Canberra at

To contact the editors responsible for this story: Iain Wilson at; Bill Austin at

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