In its submission to the Garnaut Climate Change Review, the Clean Energy Council has said that the early introduction of an emissions trading scheme will provide business certainty. Moreover, with over 14,000 megawatts of potential projects ready to deploy, the Council says that Australia’s renewable energy industry is ready to meet demand.

Council Policy General Manager Rob Jackson said that, at least for the energy sector, Australia’s emissions trading scheme must begin in 2010. Moreover, he has said that the scheme should expand as reliable data about other industries’ emissions becomes available.

“We fully support the earliest feasible introduction of an emissions trading scheme (ETS) as an essential policy element required for Australia to reduce its greenhouse gas emissions to the levels required to avoid dangerous climate change,” said Mr Jackson.

Clean Energy Council CEO Rosemary Warnock said that stationary energy is responsible for 50 per cent of Australia’s emissions, adding that any climate change solution must target the energy sector specifically.

The Council’s submission

The Council’s submission to the Garnaut Review urges the introduction of an ETS scheme at the earliest feasible time. The submission calls for:

* An emission trajectory that is in line with scientific evidence and that will enable Australia to meet its Kyoto target – as well as the government’s announced target of 60 per cent reduction by 2050. * A scheme that includes all known greenhouse gases and all industries, with the scheme widening as emissions are more accurately calculated. * A scheme that allows for unlimited banking and very limited borrowing to cover administrative oversights only in balancing annual liability. It should also include transitional support for business, communities and individuals.

The Council supports multiple trajectories with a five-year notice period to provide investor certainty, with trajectories only able to be tightened to provide market predictability. It also argues that a comprehensive definition of what constitutes an offset credit permit and how they should be used is vital to the scheme’s credibility.

The Council’s submission also highlighted that an ETS will only succeed when coupled with the removal of existing market and non-market barriers. The Council said the scheme’s success requires complementary measures, including a renewable energy target and energy efficiency targets, to reduce costs and minimise disruption to the economy. The Council also emphasised the paramount importance of research and development funding and suggested that a proportion of the auction revenue be used to fund Australian research and development programs.

“We would like to see a portion of the permit revenue fed back into research and development programs to ensure Australia’s future energy supplies are sustainable. Also we support transitional measured included in the ultimate scheme design to support businesses, communities and individuals,” said Mr Jackson.

What about MRET? The need for global standards

With Australia’s future clean energy policy under review, the submission period saw the Clean Energy Council reiterate its support for the Federal Government’s 20 per cent by 2020 renewable energy target in response to claims that it may be unnecessary under an ETS.

Ms Warnock said that it is right for Australia to adopt the global standard for climate change policy and that a designated market for clean energy is an essential complement to an effective emissions trading scheme.

“A renewable energy target is the proven best way to provide both investor certainty and a competitive market for clean energy – ensuring immediate deployment and a sustainable, cost-effective climate change strategy for the long term,” she said.

The Council also highlighted the potential benefits of the supporting a clean energy market. Council estimates indicate that the 20 per cent renewable energy target will create $20 billion worth of new investment and around 50,000 jobs from now until 2020, particularly in regional areas.

The Garnaut Climate Change Review Draft Report is being launched on 4 July 2008 and the Supplementary Draft Report, which will present a comprehensive set of results from the quantitative analysis completed for the Review, will be released in late August. The Review received almost 4,000 submissions.