Prime minister wavers on the brink of climate change

Emissions trading has become the latest non-negotiable action plan to be put in the too-hard basket, now delayed for at least six months.
Prime Minister Kevin Rudd said on Thursday that the emissions trading scheme (ETS) would start at the end of 2010. This follows hard lobbying by the Australian Industry Group (AIG), which has called on the government to delay emissions trading until 2012..
"Our scheme is not proposed to be introduced until the end of 2010,” Mr Rudd told the Fairfax Radio Network. The government said last year the scheme would start on July 1, 2010.
The Opposition is making hay while the sun is shining.
“[Last week] we saw the collapse of Federal Labor’s economic credibility,” said the leader of The Nationals, Warren Truss. “[Now] we see the collapse of Labor’s political credibility.
“Mr Rudd has such a belief in the ETS and dealing with climate change – which he once referred to as ‘the great moral challenge of our time’ – that he is delaying the introduction of his ETS until after the next election.
“It is also an obvious political ploy to help Labor Premier Anna Bligh in this month’s Queensland election.
“Mr Rudd has said today that the ETS was ‘not proposed to be introduced until the end of 2010’. He obviously didn’t tell his Climate Change Minister, Penny Wong, who as recently as last Friday was standing by the timetable of a July 1 start date.
“Senator Wong’s department has also been telling interested parties in writing that July 1, 2010 was the critical date. If we can’t trust Labor on something as basic as this, can it be trusted on anything?
“This is a pathetic example of political cowardice. Labor should acknowledge that its ‘go it alone’ ETS is fatally flawed and its approach to climate change needs to be rebuilt from the bottom up,” he said.
Delay of carbon trading not just about the financial crisis
The federal government’s apparent decision to delay the carbon trading scheme by around six months may still leave Australia unprepared for its introduction, according to carbon trading expert, Jan Brandjes of Carbon Focus.
"The government has bought itself and the business community more time but even with another six months, both may well find themselves caught out by the introduction of the emissions trading scheme," says Jan Brandjes.
Mr Brandjes is in the midst of organising the Carbon Reduction & Trading Conference and says most businesses remain in the dark about even the most basic concepts associated with the new emissions regulations.
"Most don’t even realise they need to act, let alone what they need to do," he said. "Even if business started today in earnest, Australia’s business community was bound to miss the July 1 deadline because it was simply unprepared. If they do treat this extra breathing space as a holiday, we’ll see a repeat of the disastrous UK experience."
Among the presenters at the Carbon Reduction & Trading Conference will be Rob Cawthorne and Andrew Barson of the Carbon Reduction Institute. The pair will explain how small to medium enterprises can cope with the downwards pressure from large emitting companies.
"In the UK, hundreds of thousands of businesses were completely caught out because the perception that only the large companies and organisations were going to be affected left many CEOs and managers asleep at the wheel," Mr Brandjes said. "It looks like it won’t be any different here."

Intermodal investment is the key to lower emissions

The introduction of the emissions trading scheme should not be about fuel prices, but about making “fundamental changes” to establish greener supply chains, CEO of Australian Logistics Council (ALC) Hal Morris said.

The CSIRO has projected the most likely scenario for fuel prices under the carbon regime would be a 25-cent-per-litre increase, half the increase that the transport industry experienced over the last 12 months.

Mr Morris said while the estimated price rise would not significantly affect the sector, that would not solve the real problem in Australia’s supply chains.

“The cost increase will be passed on to customers and wouldn’t have much effect on the industry. And that’s the problem,” he said.

“Because it’s about changing behaviours and changing how supply chains operate to get a better carbon outcome. We need to use the carrot as well as the stick. We need to invest in innovation and technology, and assist companies to make the changes needed to get greener supply chains.”


Mr Morris said that while the government is showing its commitment to upgrade the nation’s infrastructure, the freight industry is faced with a dilemma.  

“The Australian freight sector is experiencing this ongoing, compounding growth and that doesn’t seem to be slowing any time soon,” he said.

“While freight demand is expected to double by 2020, the massive challenge is to figure out how to handle the demand using far less fuel, with fewer vehicle movements and less carbon produced.” 

Mr Morris will chair the 8th Annual AusIntermodal Summit, which will be held on September 3 and 4 in Melbourne.

The summit will examine key agendas regarding Australian freight, bringing together government officials, CEOs of Australia’s major ports, freight operators, shipping lines, rail companies, stevedores and infrastructure companies.

European emission trading to hit airlines

Airlines will need to pay more for flights to Europe as the European Union’s emissions trading scheme is to include aviation from 2012. 

The European Parliament voted 640 to 30 in favour of a rule that airlines would have to cut greenhouse gas emissions by three per cent in the first year, and by five per cent from 2013 onwards, paying for 15 per cent of their emission permits at the beginning, Reuters reported.

The result of the vote will turn the proposal into law, which will affect all airlines flying into and out of the EU, including non-European airlines.

EU environment commissioner Stavros Dimas said the vote will enable the aviation section to make a fair contribution to Europe’s climate change targets as many other sectors are already doing.

Under the scheme, all flights departing from and landing in the EU will be liable to pay a carbon tax, estimated at a minimum charge of around AUD 65.00 for long-haul flights, and AUD 14.80 for short-haul flights.

In reaction to the decision, German airline Lufthansa said: “From our perspective, the emissions trading scheme is ecologically counter-productive and economically harmful.”

The EU’s determination to tackle climate change is also countered by Australian airlines.

Qantas chief risk officer Rob Kella told The Australian the airline supported emissions trading, under the condition that the scheme did not exacerbate competitive distortion between airlines, industries or regions.

“As the price of jet fuel skyrockets, the addition of an unrealistic trading scheme will place a serious financial burden on airlines,” Mr Kella said.

“We believe the proposed EU scheme goes well beyond the current Kyoto Protocol, and introduces competitive distortion.”

Business not happy with proposed ETS timetable

While the Federal Government is pushing to begin its emissions trading scheme (ETS) in 2010, businesses are calling for the delay of the introduction arguing the scheme could significantly lift prices.
Xstrata Australia chairman Peter Coates said the success of the ETS would depend on the support of other large carbon emitters.
“We support leadership. What we don’t support is being leaders with no one following. In other words, if America and India and China do not follow, it is an absolute waste of time and enormously value-destroying, not just for our industry,” Mr Coates told The Australian.
Among other companies calling for the delay is Qantas Airways, which argues the Garnaut report’s proposal of the scheme would threaten its profitability.
“To sum it up, we estimate that an ETS as it’s currently proposed – 100 per cent auctioning – in 2010 could add up to $35 a barrel onto what we’re paying today,” Qantas chief risk officer Rob Kella told the Australian Financial Review.

Mr Kella added that introducing the scheme before other countries would disadvantage Australian-based operators, curtailing their international competitiveness.


Engine monitoring system to better prepare for ETS

Vehicle management system supplier Minorplanet has released a new engine monitoring system to help transport companies better measure and regulate their carbon emissions.

The launch came at the time of prevailing business uncertainty over the Federal Government’s emissions trading scheme (ETS).

A recent report, published by the Total Environment Centre, showed the transport sector is the second fastest growing source of Australian greenhouse gas emissions accounting for approximately 14 per cent of Australia’s total emissions with road transport accounting for ninety percent of that total.

“The Australian Government’s position is clear; transport will be a covered sector in any ETS model. This will ultimately inflate costs associated with the transport, freight and logistics industries,” the company said.

Executive chairman of Minorplanet Asia Pacific Philip Bennett said: “Minorplanet’s engine management technology is not just a breakthrough for improving road management and driver safety but also for helping operators and companies navigate through the maze of the impending emissions trading scheme.

“The full impact of the Australian Government’s proposed ETS is unknown. However, by industry acting ahead of the curve by implementing eco-efficient technologies to cut emissions now, will reduce the impact on their bottom line when the ETS comes into full effect in 2 years time.”

He said the company’s technology would cut compliance risk for the ETS by providing accurate data.

“The transport sector is heavily exposed to the impending ETS which will significantly increase overheads for the sector and will have a multiplier effect which will ultimately be passed on the consumer,” Mr Bennett said.

“This technology will help companies calculate exactly what their fleet emissions are as well as devising routes that are most the fuel efficient thus minimising their overall environmental impact and maximising their profitability.”

A national transport policy, unquestionable priority: Albanese

The need for a national transport policy for heavy vehicles is unquestionable, and the entire government, along with the transport sector, should be involved in the emissions trading scheme, Federal Infrastructure Minister Anthony Albanese has said.

Mr Albanese, speaking at the Infrastructure Partnerships Australia conference in Sydney, argued the scepticism about the proposed $20 billion infrastructure spending was generated by misunderstanding the nature of the investment.

“There are some things that the Building Australia Fund is not,” he said.

“What it is not is a business-as-usual fund whereby the states will sit down and tally up we’ve got 20 per cent of the population so we’ll bid for 30 per cent of the funds and end up settling back to 20.  It’s not like that.

“What the Building Australia Fund is there for is to turn around projects, which represent nationally significant infrastructure.”

Mr Albanese said the move towards a national transport policy is to simplify and optimise operation of the transport system, which currently is not working efficiently.

He said: “There is still some resistance from elements of the bureaucracy about the need for national systems in many of these areas. But there is no legitimate argument, which says that we shouldn’t have a single national system for the regulation, registration and licensing of heavy vehicles.

“There is no argument that says it is acceptable that in 2008 we have eight rail safety regulators and rail safety investigators. In the European Union they have one, one for the whole of Europe.”

He said it was “absurd” to have train operations constricted by the state borders, different ballast water regulations, as well as ununiformed standards for ships and skills recognition. 

In terms of the emissions trading scheme, Mr Albanese said to provide businesses with certainty, “the case for delay is untenable”, and the whole of government has to be involved in the scheme.

“I’m quite stunned that some are still mucking around at the edges and haven’t yet heard the message.  

“We have enormous opportunities, as well as challenges, arising from climate change. Australia has an opportunity to be the centre for the Asia Pacific region in terms of emissions trading,” he said.

Carbon trading sparks war between modes

Conflict between rail and road groups continues over the government’s emissions trading handouts.

Thirty representatives from Australia’s transport groups have met with Federal Climate Change Minister Penny Wong at a forum to discuss how best to curb climate change.

While rail groups argued rail is an environmentally friendly transport mode that deserves a bigger boost, the trucking sector called for more protection for their businesses and consumers under the emissions trading scheme.  

Chief executive of the Australasian Railway Association Bryan Nye said the impending scheme favoured road transport by recommending an immediate cost offset for road use, but completely disregarded rail and its environmental benefits.

“It’s giving concessions to the trucking industry,” Mr Nye told AAP. “That defeats the whole reason for having a greenhouse program. Why not give a climate change credit to encourage people to use cleaner and greener forms of transport such as coastal shipping and rail?”

The green paper has recommended fuel for heavy vehicles to be exempt from price rises under the scheme until 2011, with petrol to be exempt until 2013.

While trucking groups wanted the fuel exemption to be extended, Mr Nye said he opposed to the move.

He has previously been quoted as saying: “It is bizarre that someone catching a train to work will have to pay more under the scheme, while car users causing pollution, congestion and health impacts will be compensated.”

The shipping and aviation sectors were also worried that the scheme could give their international rivals a competitive edge as it would force up domestic fuel and ticket prices whilst international players remain unaffected.

Senator Wong said Australia had no option but to cut its emissions, and there was no easy answer.

“We’ve said in terms of the carbon pollution reduction scheme, we’re willing to talk to business about the best way to design it,” she said.

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