Forget cap and trade, market knows best: Caltex

Caltex wants greater focus on vehicle technology and transport infrastructure rather than cap and trade to reduce emissions

Caltex has criticised the Federal Government’s approach to climate change, saying there should be a greater focus on vehicle technology and transport infrastructure to reduce emissions.

Caltex Managing Director and Chief Executive Des King claims the Carbon Pollution Reduction Scheme—to be introduced in 2010—will not deliver the desired results and will only impose an unfair cost on Australian refineries.

He says it will have a limited impact on transport emissions and should not be used to shape alternative transport policies.

"Most of the emission reduction will come from changes to vehicle technology and fuel supply and from non-price measures such as improved public transport, transport infrastructure and design," King says.

According to King, the Government will not solve climate change or energy problems and should instead allow the markets to lead the way on scientific and technological innovation.

"The role of government policy is to let markets operate and only intervene where there are clear market failures and governments are able to improve outcomes," King says.

Caltex does not support being forced to commit to reducing emissions while international competitors operate without any carbon restrictions.

King claims this will not reduce emissions and will instead relocate Australia’s refinery emissions to Singapore or other Asian countries.

King wants the Government to formulate an alternative fuels policy as part of an integrated framework addressing major environmental initiatives.

There are already a number of major federal initiatives, which King says includes the reduction scheme, the Renewable Energy Target, the Energy White Paper, the Henry Tax Review, the green car scheme and AusLink and the Building Australia Fund.

"It is not realistic to formulate an alternative transport fuels policy that is independent of major policy initiatives," King says.

However, he says optimising energy and environmental policy will be "a truly heroic policy challenge" as businesses work to slash emissions as demand for oil outstrips supply.

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