A year's delay for Australia's emissions trading scheme



Kevin Rudd

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The Rudd Government will delay the start of the Carbon Pollution Reduction Scheme by one year, and bump the upper limit of the reduction target from 15 to 25 per cent of 2000 emission levels by 2020, it has been announced.

The delay in the scheme, originally slated for introduction in July 2010, is to help Australian companies manage the impacts of the global recession, Prime Minister Kevin Rudd said.

The Government will also introduce a one year fixed price phase to the scheme when it begins in July 2011, with each carbon pollution permit costing $10 per tonne to begin with. Companies will be able to purchase an unlimited number of permits, independent of market price, though they will not be able to be banked for use in later periods.

Additional help in the form of a 'Global Recession Buffer' will also be provided to assist emissions-intensive trade-exposed industries - the biggest of Australia's polluters - during the first five years of the scheme, providing them with a higher percentage of free permits.

Support for other businesses will come through the Government's $200 million Climate Change Action Fund, which will be used to provide information, audits and captial investment grants.

The second announcement of the expanded Renewable Energy Target will be in place as planned from 2010, and is hoped to drive investment in Australia's vast renewable energy resources.

To encourage carbon pollution reductions before the scheme starts, reforestation efforts will be eligible to voluntarily generate permits for carbon stored from 1 July 2010.

As well as helping Australia through the current global financial crisis, the changes come out of a need "to continue to provide maximum impetus for a strong outcome at the Copenhagen [environmental] meeting, due at the end of the year," the Prime Minister said.