We are definitely living in strange times. In trying to introduce a cap and trade policy in Australia the Rudd government has become wedged between a rock and hard place. The new team started off with laudable intentions – quickly signing Australia up to the Kyoto Protocol – and then announcing a comprehensive domestic policy to back this up with action at home. The proposed cap was to cover most of the country’s emissions and in doing so establish a carbon price to drive investment into low carbon solutions.

But the proposals were met with a barrage of relentless criticism from two opposing camps – on one side there is the opposition-backed industry lobby, claiming that the scheme would put thousands out of work and wreck the economy – on the other, the Greens, who have been harshly critical of the proposal for its lack of ambition. Both parties control enough political power to make life very difficult for the government.

Amongst this tug of war there was also a very vocal and vociferous lobby demanding that citizens’ rights to take action themselves to tackle climate change should be protected under the cap and trade scheme.

And so, inevitably, Rudd was forced to give ground – trying to steer a path between the two opposing lobbies, he chose to delay the implementation but increase the ambition. He also proposed the introduction of new measures to satisfy the citizen action lobby. And this is where it starts to get a bit weird since one idea essentially takes the Sandbag modus operandi and makes it government policy. Imitation is the sincerest form of flattery, however, we sense a political fig leaf in the making and to be honest we are not that happy about it.

It was one of our aims in setting up Sandbag that we should try to influence the development of emissions trading policy in other countries so that the mistakes made in the EU were not replicated elsewhere. Given our relative youth, however, and our UK location, we knew it would be a tough objective to meet. We hadn’t really expected to be appropriated into Australian government policy.

We first blogged about the Australian emissions trading scheme [in December](http://www.sandbag.org.uk/node/130 “”) but our interest and involvement increased earlier this year when a heated debate ignited over the fact that emissions trading schemes can undermine the potential for individual action to tackle climate change. Essentially by capping the whole economy and handing out pollution permits to the energy companies (and almost every big polluter in Australia) the only way for people to reduce emissions further is to remove permits from the scheme. (See this [article](http://www.theaustralian.news.com.au/story/0,25197,25085116-11949,00.html “”) for example). As a contribution to this debate we prepared a [submission](/site_media/pdfs/reports/CC_AUS_Offset_Submission.pdf “”) to the Australian Government’s discussion paper on a National Carbon Offset Standard.

We also emailed the Climate Change Minister, Penny Wong, with a few suggestions for how Australia could improve its scheme (based on best practice in the US RGGI Scheme and our own ideas). Alas we received no response.

The first inkling we had that our ideas were being listened to by the Australian Government was a reference to our voluntary permit retirement activities in a Senate Standing Committee on Economics. ( Report available [here](http://www.aph.gov.au/Senate/committee/economics_ctte/cprs_09/report/report.pdf “”) – it’s section 8.22 if you are really keen).

But the big surprise came this Monday when the Rudd Government announced its intention to significantly alter the CPRS legislation before it is introduced to Parliament in June.

Amongst a number of changes the Government is proposing to establish an [Australian Carbon Trust](http://www.alp.org.au/media/0509/msccwpmtres043.php “”), which would include an Energy Efficiency Savings Pledge Fund. This facility would receive voluntary contributions from individuals wishing to make sure their own actions to reduce emissions actually reduce pollution levels. The donation is then used to retire CPRS permits and the whole transaction is tax deductible. This cancellation facility is of course what Sandbag does in the EU (minus the tax deduction element which we have written about and suggested the UK Government should introduce).

While we obviously support the concept of permit cancellation, it is a very odd proposition for a government rather than NGO to be making. Permits only exist because Governments’ create and hand them out. They propose to make industry pay for them – and now they are proposing to ask citizens to pay again to take them away. This is unlikely to prove a popular proposal.

The reason Sandbag asks its members for money is because we don’t have the ability to set aside permits and can only get hold of them by campaigning or buying them. This is not the case for governments. They are in the unique position of being able to write the rules and it would be far more sensible to set up a system where permits are set aside from the outset to allow for personal action and then cancelled without any money changing hands.

They are already proposing to do just this for people opting to buy green power offerings – so they could do the same for those making verifiable energy efficiency improvements too. The amount of energy being billed for every quarter or year makes for a good record of any improvements and could be used to trigger the cancellation of a permit from the set aside pool.

We would also like to see further initiatives implemented to better connect citizens to emissions trading policy – for example, it would be great to see a commitment to maximum transparency from the outset – a government administered map of all the participants detailing their allocations and emissions would remove the need for NGOs like Sandbag to do that job and help people to scrutinise how the scheme is operating on the ground.

So, in summary, we are flattered but a little perplexed, we will try to make contact with relevant officials to discuss the proposal and how it can be improved, but if anyone would like to [get in touch in the meantime that would be excellent](/contact “”).