The Coalition is questioning the integrity of global carbon markets, the credibility of Treasury modelling and the introduction of a new tax in times of global economic uncertainty as the anti-carbon tax campaign ramps up ahead of the parliamentary debate in September.
As Labor, the Greens and the cross-bench independents prepare to pass the unpopular tax, the Coalition and business groups are intensifying a campaign to discredit modelling that estimates its impact on household prices to be modest and the international carbon markets with which the Australian scheme would link.
The Liberal Senator Mathias Cormann used the inquiry to accuse the Treasury of ”cherry-picking” evidence from a critical World Bank report in order to turn a ”bleak” picture of ”collapsing” global carbon markets into a rosy one.
A Treasury official, Meghan Quinn, defended the use of the World Bank report in the modelling document, saying there had been ”no cherry picking or lack of acknowledgement of the difficulties around the international regime” and that an increase of $11 billion between 2005 and 2009, to $144 billion, followed by a reduction to $142 billion in 2010 ”cannot be characterised as total collapse”.
The Treasury modelling found that buying pollution permits on international markets reduced the cost of Australia reaching its domestic greenhouse reduction target.
But the Coalition has highlighted examples of past fraud and the opposition finance spokesman, Andrew Robb, this week agreed with a radio announcer who said that international permits were ”issued by some bloody witchdoctor in the highlands of Borneo or something who says, well, I’ve got a million teak trees”.
The Nationals Senator Ron Boswell questioned the fact that five super-critical, coal-fired power plants in developing countries have been credited to earn carbon permits that can be sold through the United Nations ”clean development mechanism” - a decision that has also been criticised by environmental groups.
And Nationals Senator John Williams asked who would police the international markets and whether permits would be ”coming out of Nigeria” like tax scams.
The Department of Climate Change secretary, Blair Comley, whose department the Coalition has said it will probably abolish, said the government policy listed the types of international permits considered eligible.
Senator Cormann also asked Treasury if the department had been asked to provide advice on whether the start date for the carbon tax should be reconsidered ”given current global and financial circumstances”.
The executive director of Treasury’s macroeconomic group, Dr David Gruen, said ”no”, adding that there was ”no basis” on which to speculate the carbon pricing regime would be delayed.
The new Democratic Labor Party Senator, John Madigan, railed against the Treasury officials, saying ”people out there are terrified” and were the ones who ”suffer when Treasury assumptions turn out to be wrong” and demanding to know whether the modelling was based on ”fact or assumption”.
A Treasury official, Robert Heferen, said that because ”no one knows the future” Treasury ”marshalls information as best we can.”
