Industry ”rent-seekers” looking for big compensation payments under a new carbon price should be rebuffed, while electricity generators have no case for any government assistance, the Greens senator Christine Milne says.
Senator Milne said a new Productivity Commission study into effective carbon prices paid overseas will allow Labor and the Greens to pay compensation only to industries genuinely disadvantaged in comparison with international competitors. This would end the ”backroom deals” that had secured more than $39 billion in compensation over the first 10 years of the Rudd government’s emissions trading scheme.
She said no company should expect compensation just because the carbon price made it less profitable, and energy generators should expect no compensation at all.
”My view is yes, we need to compensate for genuine trade exposure, but we … are certainly not compensating businesses for loss of profitability because they failed to anticipate a carbon price that should have been clear to them for the past 20 years,” said Senator Milne, who sits on the multi-party climate committee that will negotiate a new carbon price policy.
”Otherwise we will have the same rush of rent seekers and the same process of rewarding the squeakiest wheels that we had last time. … I want to know whether these companies that are claiming adverse impacts from trade exposure have a real case,” she said.
In response to Coalition attacks over electricity price increases under a carbon tax, the Prime Minister, Julia Gillard, warned yesterday that continued uncertainty over carbon pricing would cause continuing under-investment by generators, leading to price rises and the risk of power outages.
She said that by arguing against a carbon price the Coalition was seeking ”another decade of under-investment” in electricity generation, leading to ”upwards pressure on prices and insufficient supply, risking for Australian households and businesses that there are outages and that electricity is simply not there for them when they need it to run their business or cook their dinner at home”.
The Prime Minister and her Climate Minister, Greg Combet, have been making a public case that a carbon price offers the cheapest way to reduce greenhouse emissions, but Senator Milne’s comments highlight pressure points between Labor and the Greens when the multi-party committee begins its discussion of policy detail.
The committee will meet for a third time on December 21 when Mr Combet returns from climate talks in Mexico. It is looking at all carbon pricing options, including a tax and and an emissions trading scheme with an interim fixed price.
Senator Milne said ”one of the big advantages of a minority government and the multi-party climate committee is that no amount of lobbying in backrooms can land the deals they managed to land last time”.
And she said she had never heard a convincing reason that electricity generators should get any compensation at all.
”The coal-fired generators have known for years that this is coming. It is built into their financial arrangements and their share price.”
Michael Hitchens, the chief executive of the Australian Industry Greenhouse Network, said he supported the government’s Productivity Commission inquiry, but it should check the extent to which the identified carbon costs were actually paid by industry.
