The Rudd Government’s proposed ‘cap and trade’ emissions scheme is bringing with it a degree of uncertainty as the transport
The Rudd Government’s proposed ‘cap and trade’ emissions scheme is bringing with it a degree of uncertainty as the transport industry braces itself for the ramifications of adapting to a greener future.
In a speech to the Australian Industry Group, Minister for Climate Change and Water Penny Wong has outlined the Government’s approach to reducing greenhouse gas emissions, which “at the heart of our efforts” will be the cap and trade scheme.
At the core of the scheme is carbon trading. According to Wong, the Government will set a number on the amount of emissions that can be produced. Following this, a set number of permits will be distributed to companies who can then trade these permits for a price.
This, says Wong, will force a change in how decisions are made because companies will be forced to pay for the amount of carbon they emit.
“Companies that can easily reduce emissions will do so to avoid this cost, thereby freeing up permits for those companies who have fewer opportunities to reduce their emissions,” Wong says.
Wong, however, did not outline how the scheme would be implemented, how many permits would be handed out, what the cap on emissions would be or how carbon trading would be regulated.
As such, there is hesitancy in the transport industry about the scheme due to the vague nature of it. Chief Executive of the Australian Trucking Association (ATA) Stuart St Clair believes the Government is still working through the scheme and no final decisions have been made.
“In our view, we don’t think that anyone knows [how the system will be implemented],” he says.
“I don’t mean that in a derogatory sense, it is all new territory for everybody.”
The additional paperwork as well as other regulatory measures expected to accompany the scheme “is going to cost our industry a lot of money”, according to St Clair.
“Make no bones about that,” he says.
St Clair says the Government’s decision to embrace environmentally-friendly principles will be felt in the wider community, such as on supermarket shelves, in turn pushing up inflation.
Yet St Clair did express optimism in light of Wong’s speech. As well as championing the ‘cap and trade’ scheme, the minister indicated the Government will consider the potential increased costs on the transport industry.
“They are trying to make sure that they keep an eye on what is going to happen to inflation in Australia,” he says.