Australia’s industries prefer an ETS to carbon tax

The Australian government plans to introduce a fixed price for carbon from July 1, 2012, with the tax shifting to an emissions trading scheme (ETS) within five years.

The Energy Supply Association of Australia’s chief executive, Brad Page, said a carbon tax would significantly affect the energy industry, which would prefer a cap and trade ETS. A scheme more likely to allow greater competition and flexibility within the market.

"A tax is simply a measure you pay and there's no flexibility in it... a trading scheme allows you to examine all sorts of different mechanisms," the chief executive stated recently.

Mr Page also noted that a well-designed ETS with a ‘modest’ emissions reduction target for 2020 would provide a smooth transition for the industry and allow the economy more opportunity to adjust.

The Cement Industry Federation responded to the inquiry noting that Australia's cement industry is already struggling to compete in the global market, particularly due to the high Australian dollar, and should be exempt from the tax.

The federation’s chairman, Chris Leon said almost all of Australia's direct competitors were countries in the developing world, which were unlikely to be hit with emissions penalties. Australia’s competiveness would be affected as the tax would add further pressure to the industry, he added.

"With respect to greenhouse gas emissions and given the relative carbon efficiency of the Australian industry, there is little or no global environmental benefit in locating cement manufacturing in Asia or elsewhere," the federation said in its submission.

The federation concluded alerting the government to the potential increase in greenhouse gas emissions if Australia’s cement is to be produced elsewhere. "The Australian cement industry has an emission intensity second only to Japan in the Asia-Pacific region, and with the emissions from shipping included, delivered cement from Japan would come at a higher CO₂ cost."

Read the article online at: https://www.worldcement.com/asia-pacific-rim/08062011/australia%E2%80%99s_industries_prefer_an_ets_to_carbon_tax/