Industry demanding details of ALP carbon-cap plan

Some time soon, the ALP must come clean on the details of its plans for a cap and trade system to cut carbon dioxide emissions.

The size of the cap, how it will apply and how permits will be traded will determine the ultimate cost to consumers. A cap and trade system was a centrepiece of the ALP’s national conference.

It said a legal cap on carbon pollution creates a powerful incentive for all polluting businesses to cut their pollution by investing in clean technology or finding more efficient ways of operating.

Yet the opposition has been purposely vague on the details.

The Labor manifesto adopted at the national conference said: “The cheapest, most effective way to address climate change is to put a legal cap on pollution, ­under­pinned by market mech­anisms that let business in dif­ferent ­sectors work out the best way to operate within that cap.’’

To achieve the deep cuts Labor has promised, the caps will need to be widespread and tightened over time.

The approach will differ from the government’s direct action ­approach because carbon offsets will be purchased by companies, not government.

Yet the cost will always find its way back to taxpayers and ­consumers.

The ALP has given its support to the carbon farming sector as a possible supplier of abatement to industry.

A mechanism exists already to broaden the reverse auction scheme by tightening the so-called safeguards mechanism that already works as a cap on emissions for the biggest industrial companies.

The Fisher modelling has shown the size of the task the ALP will face in meeting its ambitious 45 per cent target.

A key question is to what ­extent international permits can be used, and whether the ALP is prepared to follow the Coalition and book the fruits of the good progress made under Kyoto towards the Paris Agreement goals.

Industry is right to push hard now for details on what it might soon be called upon to pay.