Business including embattled aluminium giant Alcoa are pushing Ted Baillieu to scrap Victoria’s pollution reduction target, saying it could undermine the federal carbon scheme and lead to higher costs.
Less than two years after the former Brumby government introduced a statewide target to cut emissions by 20 per cent by 2020, the Coalition is under pressure to abandon the policy in the wake of Julia Gillard’s carbon tax.
The ambitious target is the centrepiece of the Victorian Climate Change Act, which has to be automatically reviewed by the government once the federal legislation passed.
Big business has used the review to warn that having two carbon reduction schemes would lead to duplication, higher costs, and unwanted red tape for global companies already struggling with the strong Australian dollar.
Among those pushing for the act to be overhauled, or dumped entirely, is Alcoa, which met with Mr Baillieu on Friday over the viability of its Point Henry aluminum smelter in Geelong, where 600 workers are at risk of losing their jobs. ”While Alcoa has supported the establishment of a national target for reduced greenhouse gas emissions, it is less certain that state targets are necessary or desirable,” its submission says. ”Inefficiencies and significantly increased costs can arise from state initiatives when a national carbon pricing mechanism has been established.”
Global gas and petrol company Exxon Mobil argued that the federal legislation - which will charge $23 a tonne for greenhouse gas emissions - meant ”the rationale underpinning state-based climate change legislation no longer exists”.
Loy Yang Marketing Management Company, which trades about a third of Victoria’s electricity, urged the government to scrap the act, saying it was inconsistent with the Commonwealth’s greenhouse gas emissions cap of 5 per cent by 2020.
”Any additional abatement achieved in Victoria would not be recognised under the national target,” it wrote. ”Therefore, meeting the Victorian target - as well as a national target - would lead to allocative inefficiency as effort would be expended to reduce emissions with no subsequent reward.”
Scrapping the policy would prove sensitive for the state government, which has already come under fire for policies such as cattle grazing in the Alpine National Park and restrictions on wind farms.
Environment Victoria chief executive Kelly O’Shanassy said the review was a chance for Mr Baillieu to ”reiterate the Coalition’s support for cutting greenhouse pollution and outline how they plan to achieve the 20 per cent target”.
The Coalition did not oppose the target in opposition, but since winning government has repeatedly described it as an ”aspirational” goal and refuses to say how it would be met. Environment Minister Ryan Smith also said it was ”imperative that we avoid any duplication” when he announced a review of the act last year.
Last week, his spokeswoman declined to comment other than to say: ”The report on the Climate Change Act review is being finalised. It will be tabled in Parliament in the near future.”
