Release of Carbon Pollution Reduction Scheme Exposure Draft Legislation

The Minister for Climate Change and Water, Senator the Hon. Penny Wong, released the exposure draft legislation for the Carbon Pollution Reduction Scheme (CPRS) on 10 March 2009.  Building on the Green and White Papers released last year, the exposure draft legislation sets out what is required of participants in the Scheme and the mechanisms by which the Scheme will achieve the target emissions reductions.

The Exposure Draft Legislation

The exposure draft legislation includes six bills:

Carbon Pollution Reduction Scheme Bill 2009

The draft Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009

The draft Australian Climate Change Regulatory Authority Bill 2009

The draft Carbon Pollution Reduction Scheme (Charges – General) Bill 2009

The draft Carbon Pollution Reduction Scheme (Charges – Excise) Bill 2009

The draft Carbon Pollution Reduction Scheme (Charges – Customs) Bill 2009

The Government is seeking feedback from stakeholders via submissions on the terms of the draft legislation and its effectiveness in delivering the White Paper’s policy positions by 14 April 2009.   (For further details on the White Paper see Hawker Britton’s occasional Paper).  Details about how to make a submission are available here.

Senator Wong will move a motion in the Senate recommending that the exposure draft legislation be referred to the Senate Standing Committee on Economics for review of the legislative package. This committee will report on 14 April 2009.

The Government hopes to pass the final legislation during the winter sittings of Parliament.

New Senate Inquiry into the Emissions Trading Scheme

The Greens and the Coalition have agreed to a new Senate inquiry into the emissions trading scheme (ETS) conducted by a new Senate Select Committee on Climate Policy. The committee will consist of 10 Senators –four nominated by the Leader of the Opposition in the Senate, four nominated by the Leader of the Government in the Senate, one nominated by the Leader of the Australian Greens and one nominated by the independent Senators.
The inquiry will examine whether:

  • the ETS is the best choice to effectively reduce carbon pollution at the lowest economic cost;
  • the ETS will provide incentives for long-term investment in low-emission technology;
  • the Carbon Pollution Reduction Scheme (CPRS) is environmentally effective with regard to targets; and
  • the design of the proposed scheme will send appropriate investment signals for green collar jobs, research and development, and the manufacturing and service industries, taking into account permit allocation, leakage, compensation mechanisms and additionality issues.

The terms of reference of the inquiry are available here.

The committee will report back on 14 May 2009, in time for the Senate’s scheduled June consideration of the ETS, however Senator Wong noted that the parliamentary debate could take longer.

Carbon Pollution Reduction Scheme Timeline

10 March 2009 Public release of exposure draft legislation.
March to April 2009 Phase 3 consultation of exposure draft legislation.
14 April 2009 Submissions on the exposure draft legislation for the CPRS are due.

Senate Standing Committee on Economics to report on exposure draft legislation.
14 May 2009 Senate Select Committee on Climate Policy to report on results of inquiry into ETS.
May 2009 Bills introduced into Parliament.
June 2009 Government aims to achieve passage of bills by Parliament at this time.
3rd quarter 2009 Act enters into force; Australian Climate Change Regulatory Authority (ACCRA) – the scheme regulator is established.
7-18 December 2009 United Nations Climate Change Conference in Copenhagen.
2010 CPRS expected to commence.
*information available at http://www.climatechange.gov.au/emissionstrading/timetable.html.

Outcomes in the Senate

The Government’s final bill on the CPRS is likely to be introduced into the Parliament during the Budget sitting (May/June 2009).  While the Bill will pass the House, key differences currently exist between the parties and independents in the Senate.

Greens The Greens support an ETS over a carbon tax, however they have been critical of the proposed targets of 5%-15% by 2020 in the CPRS, suggesting there should be a higher minimum target.
Senator Fielding Senator Fielding believes the start date for the CPRS (proposed for 1 July 2010) should be delayed by at least six months due to the global economic crisis.  He is concerned the CPRS could move jobs offshore and also that it does not recognise voluntary action taken by households, such as recycling, or programs that allow people to pay more for their energy to come from renewable sources.
Senator Xenophon Senator Xenophon is also concerned about job losses as a result of the higher costs faced by industry under the CPRS.
Liberal Party A broad range of views on the ETS exist within the Coalition.

  • There are those who are yet to be convinced of human induced climate change due to carbon emissions.
  • Some support a carbon tax rather than an ETS.
  • There are those who support an ETS but not the model the Government has proposed. Of these:
    • Some support the delayed commencement of an ETS because of the global financial crisis, such as Peter Costello.
    • Some are concerned that jobs will be lost offshore, such as George Brandis.
    • Some are concerned that the targets are very low such as Joe Hockey.

Leader of the Opposition, Malcolm Turnbull has opposed the proposed CPRS as he believes it will have a negative effect it will have on jobs and a minimal effect on the environment. He believes the Government should wait for the Obama administration to outline its plans and for the outcome of the Copenhagen Conference on Climate Change later this year before finalising any scheme.
Nationals The leader of the Nationals in the Senate, Barnaby Joyce, is not supportive of the CPRS.  “If the legislation is the same as the Government’s White Paper, it will not have any luck with the National Party in the Senate, because it is a recipe to put people out of work in a recession,” Senator Joyce has said.

Links

The Australian, 10 March 2009, Emissions trading laws set to miss deadline, available at http://www.theaustralian.news.com.au/story/0,25197,25163853-2702,00.html.
Hawker Britton, December 2008, The Carbon White Paper: Real politic, business opportunities and what to do, available at https://www.hawkerbritton.com/wp-content/uploads/2017/03/carbon-white-paper-real-politic-business-opportunities.htm.
Department of Climate Change [website], Exposure Draft of the Carbon Pollution Reduction Scheme Legislation, available at http://www.climatechange.gov.au/emissionstrading/legislation/index.html.
Senator the Hon. Penny Wong, Media Release: Release of CPRS Exposure Draft Legislation, 10 March 2009, available at http://www.environment.gov.au/minister/wong/2009/pubs/mr20090310.pdf.