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Last week the Australian government published a white paper on the implementation of a Carbon Pollution Reduction Scheme … an emissions trading scheme in all but name.

In true Crocodile Dundee fashion the Rudd government has declared to the EU: “That’s not an ineffective emissions trading scheme; this is an ineffective emissions trading scheme!”.

The proposed CPRS has certainly raised the bar on appeasing the major polluters. The level of credit giveaways, direct cash payments to households, allowance of CDM credits and a lack of ambition in the actual targets make the scheme more of a tax and carbon recycling program.

Here’s a run-down of 10 key facts from the white paper:

1. The Scheme will cover around 75 per cent of Australia’s emissions and involve mandatory obligations for around 1000 entities. Transport is covered, however Agriculture will only be covered from 2015 at the earliest.

2. Price cap for five years: $40 per tonne at scheme commencement, rising at five per cent real per annum.

3. A reduction in emissions of 5% from 2000 levels by 2020, if acting in isolation, rising to 15% if a global agreement is reached.

4. These targets equate to 27 -34% per capita reductions below 2000 levels. Put like that, it may sound impressive, but these figures are only 4-14% below 1990 levels.

5.Permits will be auctioned and the funds used to compensate business and households.

6. While the inclusion of transport is a positive step there are assistance measures to reduce excise and fuel duty on a cent-for-cent basis to offset the initial price impact of the scheme.

7. Significant assistance is to be given to Emissions-Intensive Trade-Exposed Industries and Strongly Affected Industries (eg. coal-fired electricity generation).

8. Compensation is to be paid to householders via cash assistance and tax offsets. 89% of low income households are estimated to receive 120% or more of the cost of living increase (without any requirement to invest in emissions abatement measures). 26 pages were devoted to ‘cameos’ explaining the impact on a number of different household structures! As a result it’s hard to work out who will actually pay for their emissions.

9. A$2.15bn allocated to the Climate Change Action Fund. This includes A$1.37bn in Small Business and Community Organisation Capital Allowances (tax breaks) and A$750m in Coal Sector Adjustment.

10. 20 per cent of electricity is to be generated from renewable sources by 2020; it will be supported by a $500 million Renewable Energy Fund. However, no information is provided on how this target will interact with voluntary measures such as GreenPower.

It will take some time to wade through the implications of all the add-ons, clauses, proposals and rhetoric. And there remains the challenge of getting this through the Senate. The Green Party will have a tough position in determining if this an adequate scheme to support, while the plan in its present (or further altered form) may be sufficient to win the support of the Liberal Party.

One item of particular interest to Sandbag members is that, following the EU model, and in spite of tough opposition, the white paper indicates that the government will not impose a limit on the voluntary retirement of permits.

Emissions policy has been slow to evolve in Australia, and the CPRS doesn’t look a great leap forward, but at least it may leave the door open to initiatives like Sandbag to make a difference.