Australian Carbon Pollution Reduction Scheme

Introduction

The Australian Government was seeking to legislate an emissions trading scheme as part of an effective framework for meeting the climate change challenge.

 

The Australian Carbon Pollution Reduction Scheme (Au CPRS) was significant for New Zealand as the NZ ETS references the Au CPRS for allocation to trade exposed industry.

  

Latest News

On 7 July 2010 Australia's new Prime Minister Julia Gillard reconfirmed the deferral of Emissions Trading until post 2012

PM Julia Gillard says the Government will stick with its intention of reviewing global progress at the end of 2012 before deciding whether to proceed with the trading scheme.

"I am holding to the decision that was announced by the Government that we will review in 2012 the nature of the community consensus in Australia about the Carbon Pollution Reduction Scheme, the progress internationally on pricing carbon and combating climate change and will make a decision then about the Carbon Pollution Reduction Scheme"

  

She has indicated she will revise Labor's climate change policy before the election, and ruled out a carbon tax as an interim measure.

"The pricing of carbon I think is best done through a market based mechanism. That is the Carbon Pollution Reduction Scheme and the 2012 timeframe stands there."

source: ABC News

  

On 27 April 2010 the Government deferred Emissions Trading until post 2012

Prime Minister Kevin Rudd says he has been forced to put his emissions trading scheme (ETS) on ice because of the Coalition's opposition and the slow pace of international climate change action.

 

Mr Rudd has confirmed the ETS has been shelved until at least 2013 so the Government can consider what the rest of the world will do beyond the expiration of the Kyoto protocol.

He says the Government remains committed to implementing the scheme but the Opposition's refusal to back it and the lack of international progress in the wake of the Copenhagen talks meant it had to be delayed.

 

"The Liberal Party have executed a complete backflip in their historical position in support of an ETS," he said.

"The rest of the world is being slower to act on appropriate action on climate change.

"It's very plain that the correct course of action is to extend the implementation date.

"What we need to make a judgment of is what happens post-2012 and what the rest of the world is doing, because the rest of the world and what they do is pretty important in terms of Australia's future actions as well."

source ABC.

Background Materials:

The Government's proposed CPRS legislation was introduced into the Australian Senate for the second time in November 2009. On the 2nd of December the Senate voted against the CPRS Bills by 41 votes to 33.

 

The legislation included changes announced  by Prime Minister Rudd, Treasurer Swan, Minister Wong and Minister Combet on 24 November 2009.

 

Policy Timeline

Event

 Timeline

Related Documents
PM Kevin Rudd announces deferment of any emissions trading until post 2012 27 April 2010 ABC News

Senate voted against CPRS legislation

2 December 2009

CPRS Legislation

CPRS legislation reintroduced to the Parliament

22 October 2009

CPRS Legislation

Senate voted against CPRS legislation

13 August 2009

CPRS Legislation

CPRS legislation introduced to Parliament

14 May 2009

CPRS Legislation

White Paper released

15 December 2008

White Paper

The Garnaut Climate Change Review presented final report

30 September 2008

The Garnaut Climate Change Review

Green Paper released

16 July 2008

Green Paper

Historical Moments

Implementation Delay Announced 4 May 2009

The Australian Government announced on the 4th of May 2009 its decision to delay the introduction of the CPRS until July 2011. This has been done to allow Australia more time to recover from the impact of the current global financial crisis.

 

For the first year of the Australian CPRS a fixed price for carbon will be set at A$10/tCO2-e. Full trading will start in the 2012-13 year. In 2010 the price caps for the 2012-2013 and 2013-2014 years will be set out in regulations.

 

The price cap will be in place for four years from 2012-13, rising at five per cent in real terms (calculated using the CPI), and the future shape of the permit price cap will be reviewed at the first independent review, which will occur by the mid 2014, in line with the original White Paper timing.

 

In addition, both categories of polluters will receive an increased quota of free permits ("Global Recession Buffer"):

  • Trade exposed energy intense emitters will get their free permit quota raised to 94.5% from 90% and
  • Second category emitters will get their free permit quota raised to 66% from 60%.
    These free permit levels will be available for the first 5 years.

 

The Australian Government has also announced the aim to reduce Australia's emissions by 25% of 2000 levels by 2020 from previously 5 to 15% of 2000 levels. This is however conditional and will depend on international action.

 

The Australian Government says that these changes have been made to meet the opposition and to enable it to get the CPRS legislation through the Senate and Parliament before the COP meeting in Copenhagen in December 2009

CPRS Draft Legislation Released 10 March 2009

The Exposure draft of the Carbon Pollution Reduction Scheme Legislation (The Bill) was released on the 10th of March 2009.

The Bill follows on from the White Paper (released in December 2008) and the Green Paper (released in July 2008). The Bill is the culmination of a process involving broad consultation and the White paper was published having taken into account input from more than one thousand submissions.

The Bill and accompanying fact sheets can be found here

Submissions closed on the 14th of April 2009.

Australian Emission Trading Scheme Design

The Australian Government released the White Paper on Monday 15 December 2008. The paper outlines the final design of the Carbon Pollution Reduction Scheme and the medium-term, target range for reducing carbon pollution.

This paper follows from the Green Paper, released in July 2008, which canvassed options on the design on the scheme. It takes into account the outcomes of a broad consultation and input from more than one thousand submissions.

  

For more information refer to the

 

The timetable for implementation of emissions trading in Australia is shown below:

Au CPRS - Implementation Timetable
Date Stage

July 2008

Public release of the Green Paper on scheme design

July to September 2008

Phase 2 consultation on the Green Paper

December 2008

Public release of exposure draft of legislative package

December 2008 to February 2009

Phase 3 consultation on exposure draft legislation package

End 2008

Firm indication by Government of planned medium-term trajectory for the scheme

March 2009

Bill introduced into Parliament

Mid-2009

Government aims to achieve passage of bill by Parliament at this time

During 2009

Phase 4 consultation on emissions trading regulations

4th quarter 2009

Act fails to pass 2nd senate vote

27 April 2010

Emissions trading scheme deferred until post 2012