The third meeting of the Australian Parliament's Multi-Party
Climate Change Committee on 21 December has taken a significant
step towards the formation of a carbon price mechanism with the
development of 11 principles to guide its deliberations.
It's also started considering the key design choices to be
made when developing a carbon price, including scheme architecture,
impacts, assistance measures and the issues of scheme coverage and
international linking, according to the Communiqué released
just after the meeting.
The 11 policy principles for the Committee's deliberations
Environmental effectiveness: The mechanism
should be capable of delivering reductions in carbon pollution that
are informed by the climate science, to ensure that Australia
contributes to the global mitigation task and to help transform our
economy by driving investment and innovation in clean energy and
low emissions technologies and processes.
Economic efficiency: A mechanism to price
carbon should harness the most cost-effective pollution reduction
options and facilitate informed and efficient investment decisions.
It should also minimise costs of our pollution reduction to the
economy as a whole and be consistent with Australia's
broader economic reform agenda.
Budget neutrality: The overall package of a
carbon price mechanism and associated assistance measures should be
budget-neutral. This does not preclude other measures to address
climate change being funded from the Budget, consistent with the
Government's fiscal strategy.
Competitiveness of Australian industries: The
overall package of carbon price design and associated assistance
measures should take appropriate account of impacts on the
competitiveness of all Australian industries, having regard to
carbon prices in other countries, while maintaining incentives to
Energy security: Introduction of the carbon
price should be accompanied by measures that are necessary for
maintaining energy security.
Investment certainty: A mechanism to price
carbon should provide businesses with the confidence needed to
undertake long-term investments in low emissions technology and
infrastructure, which will reduce costs for households and
businesses in the long-term. It should keep our industries at the
forefront of the research, development and deployment of new clean
technologies, attracting global investment flows and creating new
Fairness: The introduction of a carbon price
will affect Australian households and communities. Assistance
should be provided to those households and communities most needing
help to adjust to a carbon price, while striving to maintain
incentives to change behaviour and reduce pollution.
Flexibility: Internationally, climate change
policy is continuing to evolve. A mechanism to price carbon should
be sufficiently flexible to respond to changing international
circumstances, including improvements in international accounting
rules, developments in climate change science, and tangible
international action to deliver an effective global solution.
Administrative simplicity: A mechanism to price
carbon should be designed with a view to minimising both compliance
costs and implementation risks.
Clear accountabilities: A mechanism with
transparent scheme rules and clear accountabilities will help
promote business and community confidence in carbon pricing.
Supports Australia's international objectives
and obligations: An effective global solution requires
action from all major emitters to limit the global temperature rise
to less than 2 degrees. A carbon price mechanism should support the
goal of promoting international action to deliver an effective
global solution, and be consistent with Australia's foreign
policy and trade objectives.
The next major steps in the process will be reports by the
Committee's experts, Professor Ross Garnaut, Professor Will
Steffen, Mr Rod Sims and Ms Patricia Faulkner, which are expected
to be completed by June.
The Committee will meet monthly until the end of 2011, at which
time the ongoing need for the Committee will be considered.
This legal update is an overview of existing eligible project activities and new project types proposed to be developed.
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