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Government releases its Green Paper on the Carbon Pollution Reduction Scheme

The Government has released its Green Paper on the Carbon Pollution Reduction Scheme containing options and preferred approaches on issues, such as which industry sectors will be covered by emissions permits and how emission caps will be set. It also includes ways to address the impacts on Australian households, emissions-intensive trade-exposed industries and other strongly affected sectors.

Minister for Climate Change and Water, Senator Penny Wong, said?At the heart of the Carbon Pollution Reduction Scheme is emissions trading, in which the Government sets a limit on how much carbon pollution industry can produce, and then the Government sells permits up to that limit, creating an incentive to look for cleaner energy options.

?Companies can buy and sell permits from each other depending on how much they value them, thereby enabling the market to find the most efficient ways to reduce carbon pollution.?

The Government intends to implement the Carbon Pollution Reduction Scheme in 2010.

The Carbon Pollution Reduction Scheme will cover stationary energy, transport, fugitive emissions, industrial processes, waste and forestry sectors, and all six greenhouse gases counted under the Kyoto Protocol from the time the scheme begins.

To offset the initial price impact on fuel associated with the introduction of the Carbon Pollution Reduction Scheme, the Government will cut fuel taxes on a cent for cent basis over a 3 year period.

For heavy vehicle road users, who transport goods across the country, fuel taxes will be cut on a cent-for-cent basis to offset the initial price impact on fuel associated with the impact of the Carbon Pollution Reduction Scheme. The Government will review this measure after one year.

To assist rural and regional areas, the Government will provide a rebate equivalent to the excise cut for businesses in the agricultural and fishing industries for three years.

The Government will increase payments, above automatic indexation, to people in receipt of pensioner, carer, senior and allowance benefits and to provide other assistance to meet the overall increase in the cost of living flowing from the scheme.

The Government will establish the Climate Change Action Fund (CCAF) to help business transition to a cleaner economy, by providing in partnership funding for a range of activities, including:

The Government will provide transitional assistance in the form of a share of free permits to the most emissions intensive trade exposed activities.

The Government also proposes to provide a limited amount of direct assistance to existing coal-fired electricity generators.

Full post as published by Australian Regulatory Compliance Review on July 15, 2008 (boomark / email).