by Freddy Sharpe
CEO, Climate Friendly
November 16, 2011
Now it is real.
Early in the afternoon on Tuesday 8 November, 2011, the Australian Senate passed the Clean Energy Future legislation. For the first time in its history, Australia now has a legislated price on carbon.
Congratulations to the Prime Minister and her colleagues, particularly the members of the Multi Party Committee on Climate Change, for designing and shepherding this remarkably good legislation through Parliament, in the face of increasingly hysterical political opposition.
This shows the power of minority government to deliver robust policy. And there is no prospect of the legislation being repealed. The government has built an effective “Abbott-proof fence” around it and the political challenges for the Opposition Leader in delivering on his blood oath to kill it are increasingly clear.
So, what’s next?
Five hundred of our biggest polluters now have to prepare for the start of the compliance market on July 1, 2012. The rest of us will have to manage the indirect impact of price increases, offset by government support in the form of tax cuts and other payments.
The liable parties have the choice of reducing their emissions directly, paying for pollution permits or buying carbon offsets. In the first three years, only domestic offsets from land based projects will be permitted. Thereafter, all compliance obligations can be met by domestic offsets.
This will unleash the potential for land based carbon projects to deliver a range of benefits beyond just the reduction of carbon pollution. Capturing carbon in soils not only sucks CO2 out of the atmosphere, it also increases soil fertility and productivity. Agricultural returns are increased and food security is reinforced. At the same time, employment and business opportunities will blossom in regional, remote and indigenous communities.
Land based carbon capture is only one of the three policy platforms that underpin the carbon price mechanism. A focus on energy efficiency will improve the way in which we use energy, reduce waste and save money. Support for clean energy will stimulate innovation and competition in the generation of clean, renewable energy. After all, why dig up and burn fossilised solar energy when every day ten thousand times more energy than we need is delivered fresh from our giant neighbourhood nuclear reactor 150 million kilometres away? Without carbon pollution.
So we have a world class policy. Which will open up a world of opportunity.