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Carbon Pollution Reduction Scheme
The government has committed to introducing a Carbon Pollution Reduction Scheme by 2010 as the primary mechanism for reducing greenhouse gas emissions.
On 16 July 2008, the Australian Government released the Carbon Pollution Reduction Scheme Green Paper. The Green Paper outlines the government’s approach to the design of a national pollution reduction scheme. The paper identifies the key design decisions that are required, discusses alternative approaches to dealing with the key questions to be resolved and indicates preferences among options.
Feedback was sought on all elements of the Green Paper and a considerable number of submissions were received.
The Carbon Pollution Reduction Scheme White Paper, outlining the final scheme design is due to be released in December 2008.
Coverage of portfolio sectors
The Carbon Pollution Reduction Scheme will cover only domestic emissions sources and sinks that are counted in Australia’s Kyoto Protocol emissions account.
The government does not consider that it is practical at this stage to include agriculture emissions in the trading scheme at commencement. Given the importance of broad coverage, the Government is disposed to include agriculture in the scheme no earlier than 2015. A final decision on coverage of agriculture emissions will be made in 2013 following consultation and work with the industry to identify practical methods for inclusion, and to develop reliable and cost-effective methods of emissions estimation and reporting. The Government also does not consider it practical to cover emissions from deforestation. Australia's deforestation emissions have reduced markedly since 1990, largely due to government restrictions on land clearing.
The government proposes to include forestry on a voluntary or ‘opt-in’ basis from 2010. A voluntary approach is possible for forestry because, unlike other sectors of the economy, forests are likely to store more carbon than they emit. Forest landholders therefore have an incentive to voluntarily include their forests in the scheme.
The government proposes to include emissions from transport and energy in the scheme. To allow rural industries time to adjust to the scheme, the government will rebate the effect of the carbon pollution scheme on fuel costs for businesses in the agricultural and fishing industries for three years.
Further information is located on the Department of Climate Change website.