Clive Palmer’s ETS already dead

A NEW scheme to put a price on carbon has been scotched within hours of being unveiled, with the PM sealing an agreement to scrap the carbon tax.

Clive Palmer in question time in the House of Representatives yesterday. Picture: Gary Ramage

A NEW scheme to put a price on carbon has been scotched within hours of being unveiled, with Tony Abbott sealing an agreement to scrap the carbon tax but rejecting plans to put an emissions trading scheme in its place.

Scuttling a proposal from Clive Palmer and former US vice-­president Al Gore, the Prime ­Minister declared the world was “going against” the use of trading schemes and carbon taxes to act on global warming.

However, Mr Abbott struck an agreement with the Palmer United Party leader that clears the way for a final vote to repeal the carbon tax within weeks.

The government is moving to bring on the vote as soon as possible after the new Senate takes shape on July 7, limiting the time for Mr Palmer to shift position after this week’s dramatic policy announcement.

Mr Palmer made it clear yesterday that he would not make his proposal for an ETS a condition of his support to repeal the carbon tax.

That position was also confirmed when the PUP leader held a private meeting with Mr Abbott yesterday morning, clearing the way for further meetings on ­budget bills as Labor rejects $39.3 billion in savings.

The nation is now on course for the repeal of the carbon tax, the veto of Mr Abbott’s alternative­ ­“direct action” carbon abatement program and the rejection of Mr Palmer’s mooted ETS.

While Mr Palmer talked of ­securing an ETS with a global agreement from China, the US and other major trading partners, Mr Abbott dismissed the idea.

Mr Abbott claimed there was “no country in the world” adopting an ETS in its economy.

“When it comes to carbon taxes and emissions trading schemes, the world is going against the Greens’ view,” the Prime Minister told parliament.

He said the European scheme covered only 45 per cent of emissions at about $8 a tonne, the ­Californian scheme only covered 35 per cent of emissions at $12 a tonne and a pilot scheme in Beijing offered 99 per cent of its permits free of charge to industry.

Climate Institute chief executive John Connor said those claims misled voters because the schemes were “strengthening and working” around the world.

“The most misleading ­statement is around California’s scheme — it will be expanded to 85 per cent of emissions next year,” Mr Connor said.

While Mr Palmer talked up his plan for an ETS with an initial price of zero and no firm start date, the idea did not win any support from Labor and the Greens as they argued for the ETS that is in existing legislation. Mr Palmer said he would not insist on his ETS as a condition for repealing the carbon tax. Asked yesterday if mandating an ETS was a condition of support, he said, “No it’s not” and noted there were separate bills as part of the package.

The PUP amendment on an ETS will be put forward in the bill to abolish the Climate Change Authority, not the bill to abolish the carbon tax itself.

On Wednesday night, Mr Palmer was asked on ABC TV’s Lateline: “You won’t make your ­repeal of carbon tax contingent on any of these other things you want to see happen?”

Mr Palmer replied: “That’s right, yeah.”

The PUP leader redoubled his objections yesterday to Mr Abbott’s direct action policy, which offers several billion dollars in spending on green projects rather than using market price to cut greenhouse gas emissions.

Labor and the Greens also made it clear they would reject the policy even if other climate-change policies were dismantled.

The government will also be forced to retain some of Labor’s climate programs as it fails to ­secure the numbers in the Senate to modify the renewable energy target, which decrees that 20 per cent of power comes from renewable sources by 2020.

In an apparent concession to Mr Palmer, the government ­delayed a bill in the lower house yesterday to abolish the Clean ­Energy Finance Corporation, which now has the PUP’s support to keep investing $10bn in green projects.

Greens leader Christine Milne warned Australia was at risk of a policy gap on climate change. “If circumstances do not change, Australia will be left with no direct action plan, no carbon price and no emissions trading scheme,” Senator Milne told the Senate.

Environment Minister Greg Hunt signalled new measures to force power companies to cut ­prices for consumers after the ­carbon tax was repealed.

Mr Palmer has made the tougher consumer protection the only condition for his support for the repeal, stepping up pressure on the government to get the Australian Competition and Consumer Commission to ensure prices fall.

Mr Hunt told parliament that the ACCC was “on the job” to make sure prices fell.

“But we are happy to take the considerations of members of this house and to go even further and to enshrine in legislation guarantees over and above what we already have,” he said. “So prices will be lower than they would otherwise have been. Electricity and gas costs will be down.”

The amendments are expected to be introduced into the carbon tax repeal package when it is debated in the Senate after July 7, the first day of sitting for new senators including three from PUP and the aligned Ricky Muir from the Australian Motoring Enthusiast Party.

The government expects the repeal to be put to a vote in the week beginning July 14.

As it continues to fight for its budget, the government appointed former health department boss Jane Halton as Finance Department secretary for five years. It also reappointed Mike Mrdak as Department of Infrastructure and Regional Development secretary for three years.