Aside from the choice of members forming the Prime Ministerial task group on emissions trading, the task group’s term of reference constitute another cause for concern in Howard’s proposed inquiry into establishing an emissions trading system.

Their terms of reference limit the task group to an inquiry that considers Australia’s profitable and prospering fossil fuels industry, and rightly so. Any inquiry in this area should be conducted with specific reference to Australia’s economic drivers. To advise on an emissions trading system that isn’t adequately adapted and reflective of Australia’s economic backdrop would be a waste of time for all involved.

But the real concern lies in the requirement that the group must advise on the “nature and design of a workable global emissions trading system of the type that Australia would be able to participate”.

It appears that the Federal Government is blind to the fact that, according to the World Bank, in the first nine months of this year global carbon trading volumes doubled (worth $24.6 billion) from what they were last year. Information like this leads us to conclude that in fact there is a global market for carbon trading.

Irrespective of whether this market is fully integrated or not, it seems short-sighted, to put it politely, that the task group would develop a proposal for a global trading system when clearly they should be looking at how Australia can implement a domestic emissions trading system capable of participating in international carbon markets as they stand today and in the near future.

The Government’s attitude was no different last month in Nairobi where it pushed for a “new Kyoto”. Suggesting a new Kyoto and now looking to design a new global emissions trading system is hubristic, obstinate, and unhelpful.

Worse, it may result in ostracising Australia further from established emissions trading opportunities around the world. What use is a global system based on Australia’s needs only? Co-operation between sovereign states is vital if a truly integrated global emissions trading market is to exist. Will this government ever learn?

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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