Wednesday, April 30, 2008

Emissions trading scheme called unfair

The Government's emissions trading scheme (ETS) is unfair, says the Sustainability Council.

The environmental think tank says that if the ETS goes ahead in its proposed form, householders, road users and small and medium enterprises will pay 90 percent of the money required by the scheme until 2013 - despite the fact they will generate only a third of the nation's greenhouse gases in that time.

In a report entitled The Carbon Challenge, the council, Victoria University senior lecturer in economics Geoff Bertram, and council executive director Simon Terry say farmers and big industries are being heavily exempted and rebated and will escape about $4 billion of the $4.4 billion in net payments through the ETS until 2012.

"As the great bulk of transport fuel charges [will be] paid directly or indirectly by small to medium businesses and households, it is these groups which will 'carry' the ETS," Mr Terry says.

The $4 billion paid by these groups will include $2.8 billion in charges on emissions and $1.2 billion in "windfall profits" to generators of renewable electricity. These electricity generators will collect a total of $1.8 billion in windfall profits.

Mr Terry says farmers and the rest of the agricultural sector will also pick up a net subsidy of $1.31 billion by 2012, after paying for carbon charges on electricity and fuels.

The Sustainability Council says that, although the ETS will hit motorists, householders and small businesses hard (and cost a lot of jobs), it will make little difference to the nation's greenhouse gas emissions in the first Kyoto commitment period.

The council wants the blanket subsidies now being offered to farmers and big industries to be dropped, and the carbon charges to be spread fairly.

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