Fed: Judgment day looms for troubled ETS

AAP General News (Australia)
08-07-2009
Fed: Judgment day looms for troubled ETS

By Cathy Alexander

CANBERRA, Aug 7 AAP - Judgment day for the troubled emissions trading scheme is coming
next week - and it seems doomed.

Parliament is resuming after the winter holidays, and senators have promised to vote
on the ETS by Thursday evening.

Years of debate, dozens of reports and countless heated arguments will culminate in
the vote, when Australia's response to climate change could be decided.

But if the ETS was a horse you wouldn't back it.

No opposition party or senator likes the scheme so it seems set for defeat.

That, however, wouldn't mean the ETS would be sent to the knacker's yard.

The government could try again later this year or next year, when the scheme may pass
with the opposition's grudging support.

There are critical issues at play, both environmental and political. The ETS, due to
start in 2011, is Australia's main weapon in the fight against climate change.

It is effectively a tax on carbon pollution.

The final shape of the scheme will affect the cost of electricity, petrol, gas - even
red meat and taking rubbish to the tip.

So the decisions the politicians make will affect households' wallets - and businesses'
- for decades.

Politically, it's a hot topic. The government wants the ETS monkey off its back so
it can meet a key election promise, but it's proving difficult.

The opposition faces a major challenge in coalescing around a position on the ETS.

Ugly splits have emerged, and next week could be tough for embattled Opposition Leader
Malcolm Turnbull.

So why does the ETS appear doomed this time around?

The government does not have a majority in the Senate and needs the support of either
the opposition, or the Australian Greens and two other cross-bench senators.

The opposition says the ETS should not be settled until after United Nations climate
talks in Copenhagen, Denmark, in December.

The opposition has demanded the scheme be made more business-friendly, but, critically,
it appears these will not be presented as amendments next week.

"In light of no support from the coalition, the Greens and independent senators, it
would appear that the bill will not pass the Senate next week," the opposition's ETS spokesman
Andrew Robb told AAP on Friday.

The Greens will move to beef up the target to reduce emissions, from the government's
five to 25 per cent cut, to a 25 to 40 per cent cut. That won't happen, so the Greens
will vote "no".

Independent senator Nick Xenophon won't vote for the ETS without big changes, while
Family First senator Steve Fielding is not convinced humans are affecting the climate.

It may be that senators do not even get into a proper debate about amendments to the
scheme, instead voting it down quickly.

Then again, miracles do happen in the Senate.

It's an outside chance the ETS could pass. The odds are long, but the ability of senators
to surprise when under pressure should not be underestimated.

Richard Denniss, executive director of the Australia Institute, said the chance of
the ETS passing was "very, very small".

"I think its demise looks inevitable," he said.

John Connor, chief executive of the Climate Institute, rated the chance of the ETS
passing as "very slim".

"I don't have high expectations."

If the scheme is torpedoed next week, does it matter?

The scheme is due to start with a dry run in just under two years' time, and to start
properly in three years' time. What's the hurry?

The government can put it up again in November - and if senators vote "no" again, that
leaves Prime Minister Kevin Rudd with the option of going to an early, double dissolution
election which would be bad news for the Liberals.

Many observers believe the opposition cannot afford to vote "no" twice, so would play
ball with the government, secure some amendments, and pass the scheme.

It may be that next week's vote will be an exercise in opposition parties voicing their
complaints about the ETS and voting it down, after which the real work on passing the
scheme can begin.

But a defeat in the Senate could be problematic. The government wants its scheme bedded
down before Copenhagen, to boost momentum on climate change.

And the delay in sorting out the ETS is causing uncertainty among investors and companies
who don't know where to put their money when it comes to energy.

Dr Denniss said it would be a "big blow" to the government if the scheme failed next week.

Questions have been raised about the government's handling of the ETS. It's almost
two years since the last election, and no non-Labor senator supports the scheme.

Non-Labor senators complain the government has not taken on board their concerns about
the ETS or genuinely discussed changes.

"Minister Wong has flatly rejected any discussion and is pushing ahead with a 'take
it or leave' approach to the Senate vote," Mr Robb said of Climate Change Minister Penny
Wong.

Next week is going to be a parliamentary rollercoaster ride on climate change.

The opposition is expected to release independent modelling on alternatives to the
ETS, and amendments to it.

Parliament may also debate the second-biggest climate policy - the renewable energy
target (RET). Separate to the ETS, the RET will see 20 per cent of electricity come from
renewable sources by 2020.

Expect plenty of arguing over climate change in the corridors of Canberra next week
- but don't hold out for the resolution of key bills.

The ETS has had a long gestation.

Efforts to bring about a delivery next week may fail - but it will probably get born
sooner or later.

AAP ca/so/srp/mn

KEYWORD: CLIMATE (AAP BACKGROUNDER)

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