Rudd puts deal to Opposition to break ETS impasse

By: Jason Whittaker

By Brad Gardner The Federal Government has proposed increasing handouts to heavy polluting sectors in an attempt to reach a

By Brad Gardner

The Federal Government has proposed increasing handouts to heavy polluting sectors in an attempt to reach a deal with the Opposition on emissions trading.

The Government released the details of its plan yesterday (Tuesday, November 24), saying assistance for the coal industry will be doubled from $750 million to $1.5 billion over five years.

The electricity sector will receive an increase in the number of permits from $3.3 billion to $7.3 billion once the Carbon Pollution Reduction Scheme (CPRS) begins.

A $1.1 billion "assistance program" will also be introduced to help medium and large manufacturing and mining businesses deal with any increases under the CPRS, increasing the cost to the Budget by $7 billion over the period to 2019-20.

Eligible emissions-intensive trade-exposed industries will also receive permanent 60 percent assistance with a 10 percent buffer or 90 percent assistance with a 5 percent buffer.

There have been no changes made to transport’s role under the CPRS, which will require fuel manufacturers to buy permits and then pass costs down the chain.

In releasing the proposed amendments, the Government called on the Opposition to support emissions trading.

"The Carbon Pollution Reduction Scheme is a major economic and environmental reform that will take Australia to a low carbon future," a government statement says.

"We call on the Opposition to support this negotiated package to ensure a vote on this package before Parliament rises this week."

Despite the increase in assistance, the Government says Australia can still achieve a 5 percent reduction in emissions.

The Coalition is divided on the issue, with the Nationals and some Liberals refusing to support the scheme, prompting today’s leadership challenge.

The Greens have also opposed the scheme because they say it does not do enough to reduce Australia’s carbon emissions.

Nationals Senator John Williams told ABCheavy vehicle operators would be forced to pay more for fuel and new vehicles if the CPRS passes.

Under emissions trading, companies must buy permits to pollute. Those who need more permits can trade them in the marketplace.

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