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Flaws must be addressed in new carbon tax laws

05 May, 2011

If the Federal Government is to reduce carbon emissions, it needs to learn from its previous errors in designing the failed Emissions Trading Scheme (ETS) of 2009-10, according to Dr Nicola Durrant, a leading climate change legal expert from Queensland University of Technology (QUT).

"It is a positive step for Australia to be proposing a carbon tax or trading scheme. However, an effective legal framework is essential. Otherwise, it may be impossible to achieve the goal of reducing carbon emissions in a significant way," said Dr Durrant, whose book Legal Responses to Climate Change, was launched in April at QUT's Gardens Point campus by Queensland Minister for Education Cameron Dick.

Dr Durrant said one major legal flaw of the former ETS was the failure to state Australia's emissions reduction targets in the legislation, and the failure to detail a timeframe for achieving those reductions.

She said it was vital the government addressed this issue as it designed the new carbon pricing legislation.

"The government needs to design its scheme to incorporate a long-term emissions reduction target and a timeframe for achieving that target," she said.

"Appropriate medium and long-term emission reduction targets, with corresponding caps for the carbon pricing scheme, should be deep enough to contribute to global efforts to mitigate climate change.

"Another significant error made by Australian law-makers in the past was the proposed offering of free carbon permits to some industry sectors.

"A key objective of 'carbon pricing' is to impose a duty on intensive carbon polluters to pay for the social cost of their polluting behaviours.

"The principal of 'polluter pays' is clearly not achieved where certain industries or sectors under the scheme are provided with free allocations of carbon permits."

Dr Durrant said another major error in the past was the proposal to allow an unlimited number of import credits from overseas carbon trading markets.

"The Federal Government is suggesting we allow the import of international carbon instruments from overseas markets after an initial three to five year period," she said.

"The rules surrounding this have not been announced yet. However, with the previous ETS it was proposed that the number of imports of international offsets would be unlimited - which would be very undesirable.

"Unlimited offsets would undermine the cap set for the carbon pricing scheme - resulting in excess supply of carbon instruments to the market and, ultimately, lower carbon prices.

"Like the other potential loopholes, this would also undermine the objective of considerably reducing carbon emissions."

Dr Durrant details a comprehensive analysis of climate change laws here and overseas in her book, Legal Responses to Climate Change.

The book has been written with the legal community, politicians, bureaucrats and general public in mind.

Source: Queensland University of Technology

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