Australia's government announces a one-year delay to its carbon emissions trading scheme, promising more support to big industry but opening the door to a tougher 2020 target in a bid to win its approval. Prime Minister Kevin Rudd has been under pressure from industry and opposition politicians to water down or even ditch carbon-trading laws, which they say are too costly in the current tough economic climate. Following are comments on the move. For a full story, see [ID:nSYD475320] -------------------------------------------------------------- COMMENT: CHRISTINE MILNE, CLIMATE SPOKESWOMAN, AUSTRALIAN GREENS "The (government ) no doubt is under pressure from the coal industry and the big emitters. this is the best deal they could ever hope for. They get a slow start, a weak price, maximum free permits, and they leave us with huge risk of catastrophic climate change. "It is a strategy that is environmentally reckless, and economically reckless." MARTIJN WILDER, HEAD OF GLOBAL CLIMATE CHANGE AND EMISSIONS TRADING PRACTICE, BAKER & MCKENZIE "This indicates a further attempt by the government to balance all the competing interests in an attempt to get the legislation through. "I definitely see this making it easier for the legislation to pass the Senate. It puts the opposition in a more difficult position. A lot of the issues the opposition has called for, the government has addressed." DON VOELTE, CHIEF EXECUTIVE, WOODSIDE PETROLEUM "The government is well aware on the area of concerns and these little changes announced today are an attempt to fix it up. But they are little baby steps when what we need is a giant leap. "Having the A$10/T fixed price for the first year doesn't mean anything for us, considering our LNG projects, such as Browse, are going to last for next 20-30 years or more. "We stand by our comment that the Australian government should be adopting a policy that has LNG as part of solution and not a problem, but we constantly don't see that recognition." MALCOLM TURNBULL, LEADER OF THE OPPOSITION COALITION "On the basis of what we have seen today, no we wouldn't support it. "Now that he said the scheme would not need to start until 2011 there is absolutely no need for the legislation to be rushed through parliament in the next five or six weeks." SHANE OLIVER, HEAD OF INVESTMENT STRATEGY, AMP CAPITAL INVESTORS "I think for the broader market the delay would be seen as a positive as there was short-term uncertainty associated with the introduction of carbon trading in the first place." MATTHEW WARREN, CHIEF EXECUTIVE, CLEAN ENERGY COUNCIL "While we are disappointed we are not getting on with carbon trading now, the changes reinforce the importance of complimentary measures. It underlines the need for the government to pass its renewable energy target through parliament in the coming weeks." FRANK TOPHAM, MANAGER GOVERNMENT AFFAIRS AND MEDIA, CALTEX AUSTRALIA "Caltex believes the delay in the scheme will enable the parliament to examine major flaws with the design of the CPRS. These flaws include the lack of a level playing field against international competitors, including overseas oil refineries. "Emissions-intensive trade exposed industries like oil refining should recive a 100 percent clear allocation of permits until international competitors such as refineries in Singapore bear the same carbon costs." MILES PROSSER, PRESIDENT, AUSTRALIAN ALUMINIUM COUNCIL "The pressure is going to be reduced slightly but there are still some very aggressive market forces in play out there in terms of where the aluminium price is and where supply and demand is. "It would have quite alarming to have a scheme like this come in coinciding with these market pressures... It is a delay in substantially increased costs, but it's not bringing forward some extra money for these companies." STEVE CAMPBELL, HEAD OF CAMPAIGNS, GREENPEACE "If the point of having a climate policy is to avoid catastrophe, then the new announcements still fall dismally short. Rudd is granting more massive exemptions and free permits to the biggest polluters. It will still allow polluting industries to offset their emissions through forest offsets on the international market, even further undermining the effectiveness of a scheme that was already useless." MITCH HOOKE, CHIEF EXECUTIVE, MINERALS COUNCIL OF AUSTRALIA "These are changes at the margin. They will not materially improve the environmental outcomes or reduce the economic impact of the scheme. Under today's changes, instead of being hit with A$10 billion in carbon costs over the first 5 years of the scheme, the minerals sector faces an impost of A$9 billion. "The MCA welcomes the government's recognition that its CPRS needs changes. But change must be directed at the underlying fundamentals not just tinkering at the margins. "Business' need for certainty is not served by the kind of certainty this scheme will deliver. The proposed one year delay amounts to little more than a temporary stay of execution for thousands of mining jobs and billions of dollars in investment including in breakthrough low emissions technologies." SEAN LUCY, HEAD OF CARBON SOLUTIONS GROUP, NAB "Our concern is about the impact on investment. Whether or not you have a financial crisis, the same questions apply regarding the difficult choices that we make. We're trying to alter the structure of the economy. The sooner you start the process the easier it is to invest with confidence in the future." MICHAEL HEFFERNAN, STRATEGIST, AUSTOCK GROUP "Generally the whole market would benefit (from a delay). The (stocks) rise is icing on a pretty robust cake, and this emissions trading decision would only enhance the prospects of our markets doing well, particularly stocks that have been heavily exposed to the detriment due to this thing." CHRIS HALLIWELL, SENIOR BROKER, TFS GREEN "There's been an increasing element of uncertainty and that has tended to create a holding pattern in the market. The electricity market in particular has struggled to trade without knowing the date of CPRS (carbon pollution reduction scheme) commencement. People would really just like to know when it will happen instead of it being a moveable feast... "If the Australian position on an ETS (emissions trading scheme) is still uncertain by the time Copenhagen comes around, Australia's impact and value-add to an effective international dialogue, and achieving positive resolutions, would be clearly undermined. "The government need to call it, and stick to it and arrive in Copenhagen committed to it. If a delay in scheme commencement is what it will take to get that up politically, then that is the way forward." FERNANDO BRODER, HEAD OF ENVIRONMENTAL PRODUCTS, NEXTGEN "Half of the market was expecting it and even the other half was a bit sceptical even though they wanted the scheme to go ahead. The possibility of a delay had been factored in. "We've seen a couple of deals in AEUs (Australian Emission Units) already but they were conditional on the scheme being up and running. Most of the players were a bit sceptical in terms of trading, or their risk managers didn't want them to do deals, and I guess we will see that sort of behaviour continuing until there's come certainty to when the scheme will start."The immediate effect is that we won't see an increase in trades, which is not that great as you take away price discovery, you take away liquidity. GARY COX, VICE PRESIDENT COMMODITIES/ENERGY, NEWEDGE AUSTRALIA: "I'm a little surprised but I suppose the good thing is at least it gets resolved because of the worst outcome is continued uncertainty about what is going to happen." -------------------------------------------------------------- Details of the Australian government's legislation are available at www.climatechange.gov.au. For Reuters coverage of the Australian carbon debate, see [ID:nSYD32519] For additional news and analysis on the global carbon markets, please go to http://www.communities.thomsonreuters.com and sign up to our free Carbon Interactive newsletter. 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Villager try to catch money thrown by donors during the opening ceremony of the first cyclone shelter in Pyar Pon township in Myanmar's delta region May 2, 2009. Cyclone Nargis, the ...
