It took a little more than a month but ILN finally received a response to its questions around what happens when the carbon tax morphs into a carbon trading scheme in coming years.

Unfortunately, it seems that questions which require a yes/no response are left unfulfilled. What is clear is that the government believes it is acceptable for industry to pay for reduced carbon emissions anywhere in the world instead of purely in Australia – so don’t expect any improvements on the general air pollution front.

What we asked Combet:

• Is it true that Australian emitters will be able to offset their Australian emissions by buying carbon permits from overseas under the plans for your government’s carbon scheme?
• Is it true that under the carbon scheme Australian emitters will also be able to offset their Australian emissions by spending money on foreign-based Clean Development Mechanisms which are administered by the United Nations, and which provide revenue to the United Nations?
• Is there a risk that carbon trading and involvement in UN-run CDMs could be cheaper than meaningful operational changes in Australia to reduce carbon emissions?
• Is the government aware that carbon trading is a revenue stream for foreign-based investment banks like Goldman Sachs?
• Does the government believe an Australia-based carbon trading exchange would keep more Australian money in the country under its carbon scheme and will it therefore be interested in the establishment of an Australia-based carbon trading exchange?
• Taking in the above questions, it would seem that the carbon scheme benefits foreign interests, specifically the carbon-trading investment banks, foreign-based carbon trading exchanges and the United Nations, which would effectively mean that billions of Australian dollars will be exported overseas in order for Australian emitters to maintain their existing emissions levels within the country. What is your view of that assessment?
• Given that the union movement in the coal industry, which is of course relevant to your electorate, often criticises the foreign-based mining companies which operate here, are you at risk of a backlash from a Labor-leaning support base when it eventually realises that the existing plan for carbon pricing will also benefit foreign players?

What we got from Combet’s spokesperson:

When the carbon price mechanism moves to the floating price period from 2015-16, liable entities will be able to meet up to 50 per cent of their liability though purchasing eligible international carbon units.

This is a positive feature of the carbon pricing mechanism.

It reduces costs for Australian business and the Australian economy and it achieves the same outcome for the environment – a tonne of pollution reduced anywhere in the world has the same environmental benefit.

Australian businesses liable to pay the carbon price will look for opportunities to reduce emissions at least cost. They will make decisions about when it is cost effective to achieve abatement in Australia and when it makes more sense to purchase international units.

Treasury analysis shows that if Australian emitters were not allowed to purchase international units to meet their obligations, it would double the cost to our economy of achieving the bipartisan target of reducing greenhouse gas emissions to five per cent below 2000 levels by 2020.

International linking is supported by business organisations. A similar approach was proposed by former Prime Minister John Howard’s Task Group on Emissions Trading.

Trade unions also support the Gillard government’s Clean Energy Future package.

The union movement recognises the need to maintain industry competitiveness while reducing Australia’s carbon pollution and that is why they support an emissions trading scheme rather than costly and ineffective subsidies for polluters as advocated by the Opposition.

For example, the ACTU stated that the CEF package: “... will provide certainty to Australian workers and their families and allow them to begin planning for the largest economic adjustment for a generation.”

Click here for the ACTU media release.

The AMWU “...welcomed the Federal Government’s historic $15 billion investment in jobs, announced in today’s carbon price package. AMWU National Secretary Dave Oliver said the package would position Australian manufacturing for a strong future.”

Click here for the AMWU article.