Global Biz

Australian business pushes for low carbon price

(Agencies)
Updated: 2011-05-30 15:30

CANBERRA - Australia's biggest industry groups urged the government to set a starting price at A$10 a ton for carbon emissions when a planned carbon tax launches in mid 2012, at least half the recommendation of the government's top climate adviser.

The key manufacturing lobby group the Australian Industry Group, and the influential Business Council of Australia, which represents the country's top 100 companies, argue a lower carbon price is needed to maintain competitiveness.

"If, as the government plans, Australia prices carbon from 2012, it needs to address the serious risks to the survival of big wealth generating and employing businesses in Australia," AI Group chief executive Heather Ridout said on Monday.

The Business Council of Australia represents Australia's biggest companies and includes global miners such as BHP Billiton and Rio Tinto, which are likely to be subject to the new tax.

Government, Greens and independent lawmakers are currently working out details of the carbon tax, including the starting price and levels of compensation for industry and households, with final details expected by early July.

The calls by business for a low starting price follows an open letter from 17 energy companies, including AGL Energy, TRUenergy and Acciona, confirming support for a price on carbon.

The government wants the carbon tax on 1,000 of the country's biggest polluters to start in July 2012, with a transition to a full emissions trading scheme three to five years later, under its policy to fight global warming.

The push by business for a A$10 ($10.70) carbon price is well below the recommendation of the government's chief climate adviser Ross Garnaut, who has proposed a carbon price of between A$20 and A$30 a ton.

Australia, the world's biggest coal exporter, produces 1.5 percent of global emissions, but is one of the world's highest per-capita polluters due to a reliance on burning coal to produce 80 percent of electricity.

Prime Minister Julia Gillard promised the carbon tax after her minority government was returned to power with the support of the Greens and the three independent lawmakers after dead-heat elections in 2010.

But the carbon tax policy remains uncertain, with key independent Tony Windsor, who is on the committee working on the policy, saying he was not yet ready to commit to the scheme.

Climate Change Minister Greg Combet said weekend negotiations with the Greens and independents on the carbon tax had been constructive, but no decisions had been made.

"Well, in a negotiation like this, there's not decisions finally on every element until you've got a package together," Combet told Australian radio. "We are going to keep working away at it in the coming few weeks."