Labor will try to build further support for a carbon price through a Productivity Commission inquiry into the range of climate measures already used by Australia’s trading partners.
Climate Change Minister Greg Combet said today it was to time inject more “rigour” into assessing the effective carbon price that existed in other international economies, as Australia explored ways of putting its own price tag on carbon pollution.
Julia Gillard has also demonstrated a dogged resolve in putting a price on carbon, despite President Barack Obama’s decision to shelve plans to push through his own emissions trading scheme in the United States.
Ms Gillard reinforced that commitment after meeting Mr Obama at the APEC summit in Yokohama, although she played down expectations about the prospect of major international advances emerging from this month’s climate change conference in Cancun.
Mr Combet announced this morning the government would ask the Productivity Commission to look at the effective carbon price in a host of countries including the UK, the US, Germany, New Zealand, China, India, Japan and South Korea.
“It’s clear that many countries around the world are taking steps to reduce carbon pollution,” he told ABC radio.
“And in fact under the Copenhagen accord now 85 countries representing 80 per cent of global emissions have pledged under the accord various targets and actions to reduce carbon pollution. So it’s clear that many countries are doing things.”
The commission has been asked to estimate the effective carbon price per tonne of CO2 or carbon dioxide equivalent (such as methane) faced by the electricity generation, manufacturing and transport sectors in a range of international economies.
Mr Combet said a similar study had been released a few weeks ago by Vivid Economics which showed that the carbon price in a number of those countries was “certainly more significant” than in Australia.
“And I think we need to get as much rigour into that sort of analysis as possible, so that’s why we’re getting the Productivity Commission to do it.”
NSW independent Tony Windsor had requested more information on what steps the rest of the world was taking on pricing carbon during the negotiations to form government following the August election.
“There’s a constructive role being played by the independents and the Greens in all of the discussions that are going on,” Mr Combet said.
“The more information we can assemble about what is actually being done internationally the better.”
Mr Combet said in a statement that while some measures such as emissions trading schemes involved explicit carbon prices, other measures, such as direct regulation of technologies and renewable energy targets, imposed less transparent carbon prices.
“Against this background, the commission is requested to provide advice on the effective carbon prices that result from emissions reduction and other relevant policies in key economies, where effective carbon prices include both explicit carbon prices, such as taxes or emissions trading schemes, and implicit carbon prices,” the statement says.
Wayne Swan also said that “every policy to reduce carbon pollution puts an effective price on carbon, even if that price isn’t immediately obvious”.
“Countries around the world are taking action to reduce carbon pollution and an open trading nation like Australia can’t afford to be left behind,” the Treasurer said. “Australia needs to get started on introducing a carbon price to our economy.”
The Productivity Commission will report to the government by the end of May 2011 and its study will be published.
It will consult with the business sector, government agencies and other bodies where appropriate in both Australia and internationally.
Mr Combet said the latest Organisation for Economic Co-operation and Development report card had also emphasised that a market mechanism in the form of an emissions trading scheme was the most efficient way of reducing carbon pollution.
But this was disputed by Greens leader Bob Brown, who said the “jury was not in” on the best way to price carbon.
He said the Greens went to the last election supporting a carbon tax, and stressed that the government’s multi-party climate change committee would look at the options for determining a carbon price.
