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Industry seeks balanced approach to climate change issues

15 July, 2008

“The Garnaut report released recently moves Australia a critical step closer to an Emissions Trading Scheme (ETS), but given the times we are in it’s important that we keep to the main game of achieving least cost abatement,” Australian Industry Group Chief Executive Heather Ridout has said.

“Ai Group supports the principle that the ETS should have a coverage that is as comprehensive as it is practical and we welcome the Garnaut recommendation for a broad coverage that includes fuel.

“Ai Group supports Australia playing a leading role in developing an effective and genuinely global response to climate change.

“We also agree with the argument in the report that, until other countries impose equivalent costs on greenhouse gas emissions, Australia should adopt measures to ensure there is no loss of competitiveness on the part of Australia’s trade exposed emissions intensive businesses.

“Any action that simply results in an Australian business closing down its operations here and moving them to another country would be an exercise in futility. This would cause serious damage to Australian industry and jobs while not in any way assisting in reducing global emissions.

 Ai Group’s Position on Climate Change Policy

1)  Build an effective global response
2)  Domestic measures should achieve least cost abatement
3)  Strong support for Trade Exposed Emissions Intensive businesses
4)  An initial period of gradually rising impact
5)  Remove overlapping or duplicating regulatory measures

“The design of measures to protect Trade Exposed Emissions Intensive businesses needs to allow for the full complexity of the Australian economy and not simply be limited to a few large and wellpublicised cases. There are in fact numerous other energy intensive businesses that would also be adversely affected. These measures also need to apply to import competing as well as exporting businesses.

“A 2010 start date for the introduction of the ETS is achievable if it begins gently before accelerating to meet medium and longer-term targets. Having a more gradual initial phase, as proposed in the Garnaut report would be consistent with Australia’s Kyoto commitments and would provide business with invaluable breathing room as it adjusts to new compliance obligations and additional costs.

“Once it is phased in, the ETS should be the primary approach to Australia’s greenhouse gas abatement effort. We need to avoid duplication of regulation at both commonwealth and state levels. Existing regulatory measures should be phased out as soon as possible and the need for any new measures should be assessed in the light of the reduction in emissions under the ETS,” Ridout said.

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