“The introduction of emissions trading will constitute the most significant economic and structural reform undertaken in Australia since the trade liberalisation of the 1980s,” said Federal Minister for Climate Change Penny Wong, in a statement released earlier this year. The Rudd Government’s 2010 deadline for the introduction of an emissions trading scheme is fast approaching.

However two month delays in economic modelling by Treasury, for use by the government and Professor Garnaut, not only reflects the complexity of the task at hand, but also means that Treasury’s modelling of the macro-economic impacts of an emissions trading scheme will not meet the mid June deadline, announced earlier this year by Treasurer Wayne Swan.

Australian Industry Greenhouse Network Chief Executive Michael Hitchens said that it was better that Treasury modelling has been delayed rather than to release rushed work, even though business would have liked the modelling to be available earlier. He also stated that it was not possible to comment on the emissions trading scheme design without insight into the government’s thinking on this, for which the modelling was a crucial factor.

With the release of a green paper on the ETS design and also a draft report by Professor Garnaut in late June/early July, government thoughts on the design of the scheme are expected to become a little clearer. “The green paper will canvass options and preferred approaches on a range of critical issues such as which sectors will be covered and how emissions caps will be set," according to Senator Wong. Public consultation on the green paper is scheduled from the time of release until early September and will provide the necessary lead up to the development of draft legislation on the trading scheme. Senator Wong has promised to provide a “firm indication,” by the end of this year, of how quickly emissions cuts will need to be implemented in the short term, as the draft legislation is scheduled for release at this time.

References

• Breusch, J. 'Carbon timetable falls behind,' The Australian Financial review, May 27 2008
• 'Federal govt to issue green paper on emissions trading,' http://www.industrysearch.com.au/News