Carbon trading and efficiency

5. Australian Carbon Plan More Cost-Effective, New Energy Says
Feb 9, 2010 Business Week
Australian Carbon Plan More Cost-Effective, New Energy Says
By Ben Sharples
Feb. 9 (Bloomberg) -- Australia’s climate-change bill, which includes plans for a carbon trading system similar to one used in Europe, is more cost-effective than an alternative proposal from the opposition, Bloomberg New Energy Finance said.
The Liberal-National opposition’s plan to create a fund to support emission reductions can’t guarantee a specific level of cuts and offers fewer incentives to abate carbon, Bloomberg New Energy Finance said in an e-mailed statement today.
The Labor government’s bill for its plan was blocked in the Senate last year when the Liberal-National coalition teamed up with other parties to vote against the proposed laws. The opposition’s fund would invest as much as A$1.2 billion ($1.04 billion) annually in projects that lower emissions and improve the environment, Leader Tony Abbott, 52, said last week.
“The coalition’s latest proposals do not pass muster and risk taking the debate backwards not forwards,” Guy Turner, head of carbon market research for Bloomberg New Energy Finance, said in the statement.
The plan by Australia’s Labor government will cost less than A$1.5 billion during the first four years, not A$40.6 billion estimated by the opposition, Bloomberg New Energy Finance said. The opposition’s proposal will cost A$3.2 billion during that period, Abbot said Feb. 2.
The government’s plan, reintroduced into parliament last week by Prime Minister Kevin Rudd, aims to cut carbon output by 5 percent by 2020 through a cap-and-trade system. While Rudd has a majority in the nation’s lower house, he needs the backing of seven non-Labor senators in the upper house to enact legislation. Australia is scheduled to hold a federal election later this year.
Abbott said his plan would encourage households to use more renewable energy, with homes gaining additional rebates for installing solar panels. It will also use the fund for the sequestration of carbon in soil.
--Editors: Clyde Russell, Alex Devine.
To contact the reporter on this story: Ben Sharples in Melbourne at +61-3-9228-8732 +61-3-9228-8732 or bsharples@bloomberg.net
To contact the editor responsible for this story: Clyde Russell at +65-6311-2423 +65-6311-2423 or crussell7@bloomberg.net