Australia Committed to Price on Carbon, Minister Says

Australia, the world’s largest exporter of coal, is committed to establishing a price on carbon to ensure the country retains its international competitiveness, Climate Change Minister Greg Combet said.

Emitting carbon pollution should no longer be “free,” Combet said at a conference in Melbourne today. It’s in the country’s “national interest” to impose a price, which is the cheapest way of reducing emissions, he said.

Australia in April shelved climate change laws until after 2012 amid lawmaker opposition and a lack of action by other countries. Prime Minister Julia Gillard has established a multi-party committee to study options for introducing a price on carbon in a country where coal accounts for more than 80 percent of power production. The group met for the first time last week.

“I don’t think much is going to happen in the next few years,” Robert Hill, chairman of the Australian Carbon Trust, said in a separate address. There’ll be a lot of debate and a carbon price is “well off,” said the former environment minister and ex-ambassador to the United Nations.

Gillard held on to power in an Aug. 21 election after losing her majority and gaining support from the Greens Party and three independents. The committee will consider proposals including a market-based emissions-trading system, a carbon tax or a “hybrid” of both and will “usually” meet monthly, she said Sept. 27.

Policy Proposals

“The multi-party climate change committee has all options on the table about pricing carbon,” Gillard told the Queensland Media Club in Brisbane today. The committee will meet until the end of 2011, and will then consider how much progress has been made before making policy proposals, she said.

Lawmakers should consider an emissions-trading system that applies only to electricity generation and excludes transport and agriculture, AGL Energy Ltd. Chief Executive Officer Michael Fraser said Sept. 15. The Sydney-based company is the nation’s largest electricity retailer.

Australia needs to move away from coal as its main source of power to avoid competitive disadvantage once a global price on carbon emerges, BHP Billiton Ltd. Chief Executive Officer Marius Kloppers said Sept. 15. The Melbourne-based company is the world’s largest mining company and a partner in the biggest exporter of steelmaking coal.

“A market mechanism, such as a cap-and-trade emissions trading scheme is a very efficient way of going about achieving quantifiable emissions reductions,” said Climate Minister Combet, a former coal-mining engineer and union leader.

Australia at Risk

There is “real movement” happening on climate change in China and the U.S., and there’s a risk that Australia and other European countries may be left behind, Aldersgate Group Chairman Peter Young said in an address. China is spending $9 billion a month on low-carbon technologies, he said.

Aldersgate, based in London, is a coalition of businesses, organizations and individuals including United Utilities Group Plc and the Renewable Energy Association.

“All that the introduction of a carbon price is doing is recognizing within the economy the costs of carbon pollution,” said Howard Bamsey, deputy secretary of Australia’s Department of Climate Change and Energy Efficiency. “Not to do that is to create distortions in the economy and is to continue a trajectory in which Australian companies will lose competitiveness.”

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