Sydney, 16 December, 2008: The Australian Bankers’ Association (ABA) welcomes the release of the Federal Government’s “Carbon Pollution Reduction Scheme: Australia’s Low Pollution Future” (‘White Paper’).
 
The White Paper launched by the Prime Minister, The Hon. Kevin Rudd MP, outlines important policies to reduce Australia’s greenhouse gas emissions. A carbon market will be fundamental to changing the behaviour of governments, businesses and the community – which is critical to shifting Australia to a lower-emissions economy.

David Bell, Chief Executive of the ABA, said: “The banking sector is supportive of introducing a Carbon Pollution Reduction Scheme, which includes a carbon market for Australia. A market-based solution is likely to be the most effective and economically efficient way for Australia to undertake the structural adjustment required to shift to a lower-emissions economy.”

“It is in the long-term interests of the Australian economy, society and environment to take early action so that Australia can make a smooth transition, address the vulnerabilities and take advantage of the opportunities presented by climate change.”

“It is also in the long-term interests of Australia for the scheme and carbon market to be designed so that it can link easily with other carbon markets and thereby promote market growth opportunities as well as contribute to the global response to climate change.”

“While the banking sector supports the overall policy objectives of the scheme as outlined in the White Paper, we do have concerns with some design features including intervention via price controls, regulatory treatment of carbon permits and limited ability to undertake abatement activities in uncovered sectors or voluntary activities by entities or communities that do not have compliance liabilities.”

“The price of carbon should be set in the market. The imposition of a price cap¹ will create unnecessary complexity, complicate international linkages, hinder Australia’s ambitions to emerge as the ‘carbon hub’ in the Asia-Pacific region, increase transaction costs, compromise environmental and structural adjustment objectives, and ultimately result in greater uncertainty.”
 
“Notwithstanding, the White Paper demonstrates the Government’s commitment to taking action on climate change. Reducing Australia’s greenhouse gas emissions is an essential part of mitigating the effects of climate change and helping shape a global solution.”

The ABA looks forward to continuing to work with the Government on the introduction of the scheme and ensuring that the policy outlined in the White Paper translates through to the legislative and regulatory framework in a way that minimises regulatory and administrative burden and compliance costs.

The ABA also welcomes the Government’s announcements to provide additional support to research and development, deployment and commercialisation of clean technologies and renewable energy technologies and investment in energy efficiency initiatives and other carbon productivity improvements as well as assistance to businesses and communities via the Climate Change Action Fund.
 
Mr Bell said: “Adopting a comprehensive policy response, supporting innovation and building knowledge and capacity are the key principles in achieving a sustainable response to climate change that focuses on delivering both real economic outcomes and real environmental outcomes.”