Business Asks Australia to Ease Carbon Trade
CANBERRA - Environment groups demanded on Friday that Australia ignore the "greenhouse mafia" as major energy and mining companies met the government to demand greater compensation for a coming emissions trading regime. The government is planning to introduce one of the world's biggest carbon trading schemes by 2010 that will force companies to buy permits to cover their emissions, putting a market price on carbon that will encourage firms to clean up their pollution.

Big business told the government this month the scheme could be a "company killer", driving big emitters offshore or out of business.

Energy Minister Martin Ferguson met more than 70 large firms at parliament to talk over their concerns on Friday. "Giving millions of dollars of taxpayers' money to rich companies to allow them to continue polluting is immoral and uneconomic," Greenpeace climate campaigner Trish Harrup said ahead of the meeting.

The centre-left government plans to introduce carbon trading by mid-2010 to help curb greenhouse gas emissions, blamed for global warming, with compensation for consumers and help for businesses facing higher energy costs. Under the scheme still being discussed to target 1,000 large companies, energy firms will receive 30 percent of carbon permits for free, with hefty initial subsidies for other big polluters to be slowly phased out.

Companies with more than 2,000 tonnes of emissions per A$1 million in revenue would pay for only 10 percent of total emissions, while companies producing 1,500-2,000 tonnes of carbon would pay for 40 percent of their emissions.

But the country's top business lobby, the Business Council of Australia, representing 100 major firms, this month said emissions-intensive exporters in the refining, cement, coal and steel sectors would need higher-than-promised compensation to stay competitive.

Ferguson initially met three groups covering energy-intensive industries, followed by other strongly affected firms such as road transport, shipping and power generators. Tourism companies followed in a third meeting.

Reasonable people
Ferguson's office would not name participants. But miners BHP Billiton, Rio Tinto and Xstrata, plus energy firms Woodside Petroleum and ExxonMobil were believed to be closely involved. Woodside, Australia's second-largest oil and gas producer, this month said emissions trading as planned could jeopardise a massive liquefied natural gas (LNG) project off the west coast.

Prime Minister Kevin Rudd this week said tackling climate change would inevitably cost business money, but promised "reasonable people" would be able to negotiate a way forward. Australian newspapers said Ferguson was willing to compromise on extra compensation or assistance, while powerful Climate Change Minister Penny Wong favoured a tougher approach.

Australia is the world's 16th biggest carbon polluter, accounting for about 1.5 percent of global emissions, but produces five times more carbon pollution per person than China and is the fourth-largest per-capita emitter. But scientists say the country is also at high risk from global warming, which is expected to bring greater extremes of droughts and floods, rising seas and is likely to cause shifts in agricultural production and endanger the Great Barrier Reef.

A government report earlier this year said emissions from transport were projected to increase 42 percent on 1990 levels by 2012, and be 67 percent higher by 2020, while industrial process emissions would rise 49 percent by 2012 and 95 percent by 2020. But while emissions per-capita would fall 13 percent from 1990 levels, from 33 tonnes to 28 tonnes, by 2012, they would climb back to 29 tonnes per person by 2020, it said. (US$1 = A$1.16)

(By Rob Taylor, Planet Ark, 01/09/2008)