MBA ‘cautiously’ receives climate change white paper

The federal government yesterday unveiled its white paper – Carbon Pollution Reduction Scheme: Australia’s Low Pollution Future – outlining a minimum 5% carbon pollution reduction goal by 2020.The carbon pollution reduction scheme will begin in 2010 by phasing in a tax on carbon pollution, which the white paper says aims to encourage major polluters to move towards greener options.Prime Minister Kevin Rudd unveiled the white paper at the National Press Club in Canberra yesterday.“By the end of 2020, we will reduce Australia’s carbon pollution by between 5 per cent and 15 per cent, below 2000 levels,” Rudd said.“Five per cent below 2000 levels is our minimum, unconditional commitment to reduce emissions by 2020, irrespective of the actions of other nations.“Fifteen per cent below 2000 levels is our commitment to reduce emissions further.“This is a substantial commitment and will require us to turn around current trends, which if there is no policy change have Australian emissions growing by around 20 per cent between 2000 and 2020.” When taking into account projected population growth figures, Rudd added the 5% reduction by 2020 amounted to a 27% drop in carbon pollution per capita by 2020, compared to 2000 levels.However, the carbon pollution reduction targets were below those advised in the Garnaut report, which recommends Australia commits to a minimum 25% cut by 2020 or a 40% carbon reduction per capita on 2000 levels.Rudd said the current economic crisis combined with carbon pollution tax would strain businesses and the economy and was the reason for the downward revision of its targets.Meanwhile, the MBA says it welcomes the incentive for investing in green technology, despite the initial challenges the industry will face.“Dealing with climate change in the building and construction industry is extremely challenging, more so in turbulent times as a result of the global financial crisis and economic slowdown,” MBA chief executive Wilhelm Harnisch said.“The devil is in the detail, but the white paper seeks to strike the right balance in ensuring Australia has a leadership role in shaping a long-term global response to climate change, and in making sure that Australia assumes no more than its fair share of the international community’s burden to reduce greenhouse gas emissions.” He said Australia’s residential sector would face rising costs as it moves towards carbon neutrality. However, the $6 billion injection aimed at compensating Australian households for the increased costs has been welcomed by the MBA, Harnisch said.“Whilst interest rates have come down and housing affordability is beginning to improve, we need to be mindful of the increased cost to home ownership associated with climate change measures, and the inefficiencies of more stringent and mandated policies,” he said.“Master Builders is pleased to see that the federal government has responded to its calls for appropriate measures for the building industry to soften the blow.“The $1.4 billion small business capital allowance program announced today should assist builders and others to invest in energy efficient equipment such as hot water systems, insulation, lighting, heating and air conditioning.”Harnisch said the government’s policy measures would propel sweeping changes to the building and construction industry supply chain, yanking Australian buildings up to green standards.The paper has stirred up much controversy with many supporters and detractors publicly voicing their opinions.Representative body Australian Industry Group says the white paper released yesterday was a positive compromise between the struggling economy and the Garnaut report’s recommended 25% cut by 2020.However, Ai Group chief executive Heather Ridout said the compromise remained a “stretch nonetheless”.“The white paper proposals incorporated a number of major improvements sought by the Ai Group on behalf of Australian businesses,” Ridout said. “Nevertheless, the planned carbon pollution reduction scheme remains a big ask, and will have a big impact on the Australian economy.“Ai Group estimates that the scheme will add approximately $7 billion to business costs in 2010, after compensation, rising to $10.5 billion by 2020.” Ridout said the challenges of conforming to climate change targets would further strain businesses in an already struggling economy hit by the global financial crisis – or GFC as it has now become known.

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