The Rudd government has just released (19/06/09) draft regulations for the Australian Carbon Pollution Reduction Scheme (CPRS), outlining how carbon emissions will be measured and industry compensation calculated. The draft regulations specify the framework for the Emission Intensive-Trade Exposed assistance program, application procedures and reporting requirements for eligible entities under the program.

The regulations just published are the first of several disclosures on how the country’s emissions trading scheme will take shape, Australia’s Climate Change Minister Penny Wong said. The rules outline some of the highly emissions-intensive sectors that will receive up to 94.5 per cent of their expected needed amount of emission permits for free under the CPRS.
Production of carbon black, methanol, silicon, bulk flat glass, newsprint, and zinc will all be counted in this category. Moderately emission-intensive sectors will get up to 66 per cent of their allowances free of charge.

Treatment of energy-intensive trade-exposed industries under the carbon scheme is playing a major role in Australia’s debate on how to tackle climate change, as many industries and the Opposition fear jobs will be lost to countries without carbon regulations, such as China and India. In addition, Greens strongly oppose the draft, as stated by Senator Christine Milne: “The draft regulations confirm that the carbon pollution reduction scheme will be a multi-million dollar wealth transfer from the people to the big polluters, and that stands in the way of protecting the climate,” (ABC 19/06/09)

The Government says it is releasing the draft regulations earlier than normal because it wants to give MPs as much information as possible. It is indeed trying to get senators to support its scheme in an effort to have the legislation passed by the Senate next week. But the ETS legislation is in trouble. The Opposition, which does not want to vote on the scheme until next year, plans to filibuster all week to avoid it being put to a vote at all. The Greens have vowed to vote the scheme down but do not support delaying the vote. (ABC 18/06/09) If the bill is defeated, or there is a vote to defer it until August, either will count as a refusal by the Senate to pass it. In this case, things could start to become very difficult for the Rudd government, possibly triggering an early election before the end of the year. (SMH 19/06/09)

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