Position Paper - Australia's CPRS: current situation and future potential

Introduction

In the past months, the world's attention has turned to the US, whose new-found commitment to the fight against climate change has provided renewed hope that a binding and meaningful commitment can be reached at Copenhagen in late 2009. It is against this backdrop that Australia seeks to establish the future of its Carbon Pollution Reduction Scheme, with major consequences for its power sector.

Scope

*An overview of the developments of the July 2009 G8 Summit and its implications for the Copenhagen Climate Change Conference in December 2009.

*A detailed review of the political process by which the Australian Carbon Pollution Reduction Scheme will be brought to bear.

*A review of the reasons why the CPRS will fail to deliver the country's exacting emission abatement targets.

*Reasons why Australia should offer a wide suite of complementary policy measures to usher in a low-carbon Australian economy.

Highlights

There is significant scepticism that Copenhagen will not deliver a set of credible and exacting green policies and targets to address the existential threat that is global climate change. Indeed, a deal in Copenhagen will be very hard to achieve.

As it seeks to implement its own environmental framework, Australia is mindful of the impact that a new global environmental protocol could have on its national competitiveness.

The proposed Australian CPRS scheme will be passed, but not before 2010, and will fail to deliver the country's challenging emission abatement targets. Australia should look to level the economic playing field by aggressively expanding its domestic 'green tech' capabilities.

Reasons to Purchase

*Determine if and when the proposed Carbon Pollution Reduction Scheme in Australia will come to pass and the implications for the wider economy.

*Understand the key limitations of the proposed CPRS scheme and the lessons to be learned from the failed outcome of Europe's Emission Trading Scheme.

*Grasp how Australian power utiltiies can level the playing field by lobbying aggressively for the expansion of the country's cleantech capabilities.

Report Highlights
Highlights

There is significant scepticism that Copenhagen will not deliver a set of credible and exacting green policies and targets to address the existential threat that is global climate change. Indeed, a deal in Copenhagen will be very hard to achieve.

As it seeks to implement its own environmental framework, Australia is mindful of the impact that a new global environmental protocol could have on its national competitiveness.

The proposed Australian CPRS scheme will be passed, but not before 2010, and will fail to deliver the country's challenging emission abatement targets. Australia should look to level the economic playing field by aggressively expanding its domestic 'green tech' capabilities.
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DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
METHODOLOGY 2
ANALYSIS 2
The Australian carbon trading scheme is unlikely to pass the August Senate vote and will be delayed further until 2010 2
Overview 2
There are still grounds for optimism, yet a deal in Copenhagen will be very hard to achieve 3
There are reasonable concerns that Copenhagen will not deliver a set of credible and exacting green policies and targets 4
Australia is mindful of the impact that incoming carbon cap and trade mechanisms would have on its national competitiveness 5
Delay from Australia's opposition party could potentially allow the government to pass the CPRS scheme without opposition support 6
The proposed Australian CPRS scheme will be passed, but not before 2010 6
Australia's proposed CPRS scheme will not deliver the country's emission abatement targets 7
There are fears that the Labor government has not learned from the errors made by its European counterparts (1/2) 8
There are fears that the Labor government has not learned from the errors made by its European counterparts (2/2) 9
Australia should look to level the playing field by aggressively expanding its domestic 'green tech' capabilities 10
APPENDIX 11
Ask the analyst 11
Datamonitor consulting 11
Disclaimer 11
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List of Tables
List of Figures
Figure 1: The marginal source of global carbon emission growth will originate largely from the developing economies 3
Figure 2: The EU carbon emission trading framework has thus far failed to deliver the targeted carbon abatement 4
Figure 3: The CPRS would challenge the Australian economy - heavily dependant on fossil fuel power generation 5
Figure 4: In a business as usual scenario, Australia emission levels are expected to continue to rise. 7
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