ETS amendments unaffordable

Well there’s a surprise. Because of the high dollar value and the low price of carbon, the government is making excuses in advance for rejecting many of the Opposition’s proposed amendments to the ETS – not that I’m bothered, however. It will then force the Opposition to do what they should have done from the start: vote the abysmal scheme down.

THE Government has flagged it may reject several Coalition amendments to its emissions trading scheme because it will now cost $2.5 billion by 2020.

The Government’s scheme was expected to make $208 million by 2020, but yesterday’s mid-year budget outlook from Treasurer Wayne Swan revealed a big turnaround because of lower likely carbon prices and a soaring Australian dollar.

The Government’s releasing of the figures is a message to the Opposition that not all the proposed amendments, including more free permits to heavy polluting industry and the coal industry, are affordable.

Climate Change Minister Penny Wong is believed to have conveyed this message to shadow resources minister Ian Macfarlane in talks last week.

Notes accompanying yesterday’s release state: ”This [the $2.5 billion black hole] underscores the need for caution in designing assistance measures, particularly those that lead to a permanent increase in scheme costs.”

Opposition spokesman Ian Macfarlane is not surprisingly pretty annoyed at having this dropped in at the last minute:

This really stretches the friendship … dropping these numbers at a minute to midnight,” said Mr Macfarlane, who has been charged with doing a deal with the government on the ETS before the vote scheduled for late this month.

It will certainly make the negotiation more difficult – there are areas we are working on where a lack of money could make a difference.

Read it here and here.

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