Australian Carbon Trading Scheme - White Paper

White Paper

The White Paper was released on 15 December 2008. The White Paper included the Rudd Labor government's targets for Greenhouse gas emission reductions, 5% below 2000 by 2020 on a unilateral basis or up to 15% below 2000 by 2020 if also agreed by the other major emitters. This compares to the 25 to 40% cut compared to 1990 emissions recommended by the IPCC as needing to be made by developed countries to keep CO2 below 450 ppm and to have a reasonable chance of keeping global warming at less than a 2 degree Celsius increase above pre-industrial times.

The White Paper also set an indicative national emissions trajectory for the first few years of the scheme:

  • in 2010-11, 109% of 2000 levels;
  • in 2011-12, 108% of 2000 levels;
  • in 2012-13, 107% of 2000 levels.

For comparison, in 2006, Australia's emissions were 104% of 2000 levels (under Kyoto accounting).

Some of the features of the emissions trading scheme proposed were:

  1. an output as opposed to consumption based scheme
  2. A modelled carbon price range of AUD 20 to AUD 40 per tonne of carbon.
  3. Less than 1,000 businesses will have to account for their emissions and buy or be allocated free permits.
  4. AUD 4.8 billion of assistance (in the form of free permits) for the most polluting electricity generators.
  5. Financial assistance to compensate low and middle income families from increased costs.
  6. Free permits to emissions-intensive, trade-exposed businesses - such as aluminium producers, iron and steel makers, petrol refiners and LNG producers, initially totaling 25% to 33% of permits and rising to 45% by 2020.
  7. There will be total offset of the impact on fuel prices on households for 3 years.
  8. Agricultural emissions are not included initially but may be included from 2015.
  9. There will be a price cap on emissions, that will start at AUD 40 per tonne of carbon dioxide equivalent.
  10. Firms will be able to purchase unlimited quantities of emissions allocations (including CERs under the clean development mechanism) from the international market, but will not be able to sell them during the initial years.
  11. Reforestation can count as carbon credit, but deforestation and forest degradation do not count as a liability.

Read more about this topic:  Australian Carbon Trading Scheme

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