what is the cprs?
The Federal Government has proposed a "cap and trade" system.
It means greenhouse gas emissions would be limited to a particular
amount: the cap. So if there is a cap of 400 million tonnes to be allowed
to be emitted for a certain year, then 400 million emissions units
will be issued that year. These units can be traded, with their price determined
by the market.
Each year, there will be fewer permits, meaning that greenhouse gas pollution is slowly reduced.
Companies that fall under the scheme because of their level of greenhouse gas emissions can do two things:
- They can change their business practices so that they become more energy efficient. Once they have reduced their emissions to the lowest amount possible, they can buy and surrender the remaining credits they need to meet the requirements of the scheme in their operations.
- They can buy and surrender all the permits they need to meet the requirements of the scheme without changing their business practices.
Compensation schemes
Companies from sectors such as mining and electricity generators (those captured under the CPRS) have won billions of dollars in assistance for operating under such a scheme. These include issuing them free permits and/or helping them reduce their emissions.
Won't this make goods and services more expensive?
Yes, those goods and services that require a lot of emissions to produce will most likely rise in price. The Federal Government states that it will provide cash and tax offsets to low- and middle-income households to assist in the impact of such price rises. [see article below 'how would the cprs affect me?']
Are there other countries already practising such a scheme?
Yes. In January 2005, the European Union introduced the European Union Greenhouse Gas Emission Trading System (EU ETS). All 27 countries in the EU are participants. It is the world's largest multinational, multi-sector ETS.
From the article 'At a glance: guide to climate change and ETS' by GLENDA KWEK, Fairfax Media, November 26, 2009
how would the CPRS affect me?
The Rudd Government is determined to act in the national interest
to help protect families from the worst effects of dangerous climate
change. Action on climate change is in the national interest because
the cost of inaction on climate change is higher than the cost
of action. The cost to Australian families of lost jobs, less rain,
more heatwaves, more days of extreme fire danger and more extreme
weather events associated with dangerous climate change will be
higher than the cost of acting.
The Carbon Pollution Reduction Scheme (CPRS) is the cheapest and most efficient means of reducing carbon pollution. The average cost of living for households will be $624 more in 2012-13 than it otherwise would have been, without a CPRS.
To help deal with this increased cost, the CPRS contains a substantial package of financial assistance for low and middle income families. This household assistance package - worth $49 billion over ten years - will ensure all low and middle income families are assisted with the cost of acting on climate change.
There is no cost free way to tackle climate change and that is why the Government is providing household assistance to ensure low and middle income Australian households do not foot the bill for action on climate change.
The Rudd Government's household assistance package provides:
ASSISTANCE FOR LOW INCOME HOUSEHOLDS:
- All low income households will be fully compensated for the overall cost increase they face.
- Around 90 per cent of all low income households - or 2.6 million households - will receive assistance equal to around 120 per cent of the overall cost increases they face.
- Pensioners, seniors, carers and people with disability will be fully compensated for the overall cost increase they face.
ASSISTANCE FOR MIDDLE INCOME HOUSEHOLDS:
- Around 97 per cent of middle income households will receive some form of direct cash assistance under the Scheme.
- Around 50 per cent of middle income households - that will be 1.7 million households - will be fully compensated for overall cost increases flowing from the CPRS.
Once the scheme commences, household assistance will continue in perpetuity. Because these assistance payments are indexed to CPI, upfront assistance will automatically increase in line with the increasing carbon price as it affects household costs.
BACKGROUND EXAMPLES 
A family earning $100,000 (with a 50:50 income split) with two children (aged 10 and 13) would be more than fully compensated. In 2012-13, this family will receive $1014 in assistance from the Government even though the cost impact of the CPRS would be $976 for the year.
A family earning $120,000 (with a 50:50 income split) with three children (aged 4, 6 and 8) will also receive full assistance. The cost impact of the CPRS for this family in 2012-13 will be $1088, and they will receive $1240 in assistance for the year.
For other examples see www.climatechange.gov.au/government/initiatives/cprs/who-affected/households.aspx
IMPACT ON HOUSEHOLD PRICES
The Treasury modelling found that the CPRS would increases household costs by 1.1 per cent - as measured by the consumer price index (CPI). This occurs over two years:
- 0.4 per cent in 2011-12 - based on a $10 per tonne fixed carbon price in 2011-12
- 0.7 per cent in 2012-13 - based on a flexible carbon price in 2012-13, which is estimated to be $26 per tonne.
Household food prices are expected to rise by less than 1 per
cent over these two years. Price increases will be greatest for
emission intensive goods. Household electricity prices could rise
by 7 per cent in 2011-12 and 12 per cent in 2012-13. Gas prices
could rise by 4 per cent in 2011-12 and 7 per cent in 2012-13.
The overall price impact to households is estimated to be $12 a
week or $624 a year by 2012-13.
Media Statement - 25th November 2009 - from Jenny Macklin - Federal Minister for Families, Housing, Community Services and Indigenous Affairs, Wayne Swan - Federal Treasurer and Penny Wong - Federal Minister for Climate Change and Water.
what was the deal with the liberals?
The Australian Senate currently consists of Labor (32), Liberal (32), Green (5), National (4), Country Liberal (1), Family First (1) and Independent (1) senators. To enact legislation that has been passed by the House of representatives (where Labor Party has a majority and is the Government) requires it to pass the senate with at least a majority.
To ensure passage of the CPRS laws, a deal was sought and struck with the
Liberal Party under the previous leader, Malcolm Turnbull. There were many
compromises made (see the rest of the article below). But this deal cost Malcolm
Turnbull his leadership at the hands of Liberal Party Climate Change Denialists
like Tony Abbott and Nick Minchin. By the time the bill was voted on the Liberal
party had renegged on the deal (except for 2 Liberal Party Senators who felt
so strongly that they crossed the floor to vote with Government).
The vote was lost.
The Coalition has opposed the CPRS this week and it will oppose it in 2010"
- Tony Abbott, Liberal Party Leader
THE DEAL
In early 2008, the Government made clear that it intended to fulfil its election commitment by passing the CPRS in mid 2009. The Government first released this legislation in draft form in March. This package was presented to the Opposition on the basis that a vote on the Bill must be held before Parliament rises a the end of November - six months after the Government's intended passage.
The
package was a culmination of over a month of detailed negotiations between
the Government and the Opposition, and over a decade of policy development.
Under the package, industry would have received significant new assistance
to help make the transition to a low carbon future, reflecting the Opposition's
demands.
The Government had also ensured the package delivered for the environment and households. The final package on the Carbon Pollution Reduction Scheme was in the national interest: it was both environmentally credible and economically responsible.
Key elements of the package included:
- Emissions-Intensive Trade-Exposed Industries: permanently incorporating the Global Recession Buffer - which provides industries eligible for 60 per cent assistance with a 10 per cent buffer, and industries eligible for 90 per cent assistance with a 5 per cent buffer - into assistance rates. The 1.3 per cent Carbon Productivity Contribution has been retained to ensure all industries reduce their emissions.
- Coal Sector: A total of $1.5 billion in transitional assistance will be provided to the coal sector over five years. This is an increase from $750 million previously. The Government will commit $270 million to the Coal Mine Abatement Fund through the Climate Change Action Fund to assist gassy coal mines reduce emissions. In addition, the current COAG Renewable Energy Target (RET) review process will consider whether new waste coal mine gas projects should be eligible.
- Voluntary Action: The Government will ensure the CPRS takes into account
voluntary action by households. Voluntary action by households will now allow
Australia to go beyond our 2020 emissions reduction target. In addition,
the CPRS will be amended to ensure that all existing and future purchases
of GreenPower will be counted, and allow Australia to go beyond our 2020
national targets. - Electricity Sector Adjustment Scheme: An increase of $4 billion in assistance under the ESAS, increasing the total value of permits under the ESAS from $3.3 billion to $7.3 billion. A further three new measures - a Low Emissions Transition Incentive, an Energy Security Assurance Mechanism and deferred payment arrangements - will be introduced to maintain energy security and drive the transition to a low pollution future
- Electricity Prices: A Transitional Electricity Cost Assistance Program of $1.1 billion to assist medium and large manufacturing and mining businesses with CPRS-related increases in electricity prices in the early years of the Scheme.
- Agriculture: As previously announced by the Government, agricultural emissions will be excluded from the CPRS and offsets for agricultural emissions abatement will be included.
The deal would have ensured
that Australia could achieve its ambitious unconditional target of 5 per cent;
conditional target of up to 15 per cent and top-end target of 25 per cent off
2000 levels by 2020 if a global 450 parts per million outcome is achieved.
The deal put to the Opposition was fiscally responsible. The Government's commitment to ensure that around 90 per cent of low-income households receive assistance equivalent to 120 per cent or more of their cost of living increase was maintained. Although the level of assistance was modified to reflect the new carbon price estimated in the Mid Year Economic and Fiscal Outlook.
Passing the CPRS would have given Australian businesses the certainty they need to make investments. It would have also meant that Australia went to Copenhagen with a means to deliver its targets and provide a much-needed boost to negotiations on a global deal. We have delayed action on climate change for too long.
From a Media Statement - 24th November 2009 - from Kevin Rudd - Prime Minister, Penny Wong - Federal Minister for Climate Change and Water, and Greg Combet - Parliamentary Secretary for Climate Change.
why did the greens vote against it?
The vote on the CPRS in the Senate was lost 41-33, with Family First senator Steve Fielding and Nick Xenophon as well as the five Greens voting with the climate change denialist led opposition.
Together with the two rebel senators from the Liberal Party and the 32 Labor Party senators, the five Greens Party senators could have voted the CPRS into law. Why didn't they?
Greens Senator Christine Milne said “The Greens oppose the CPRS as it would fail to protect the climate”. She claims a CPRS would give other countries "an excuse to lower their level of ambition.” [from an article in Green Left Weekly by Kerry Smith, 30 May 2009].
Yet what sort of example does doing nothing set to other countries?
The Greens say they "want the government to work with them" [in the same article] yet Victorian Greens MLC Colleen Hartland welcomed the failure of the CPRS [in a Media Release 13 August 2009]. Senator Bob Brown admits that the failure to pass the CPRS "is a disappointing day for Australia" but at the same time suggests that we "join the protest rally against the Rudd Government's CPRS" [Victorian Greens website].
[the failure to pass the CPRS] ...is a disappointing day for Australia"
- Greens Senator Bob Brown
Ironically, Greens leader Bob Brown said 'the far right of the Liberal Party and the Nationals were holding the Senate to ransom on the ETS debate' only days before the Greens voted against the CPRS.
[Sydney Morning Herald 27 Nov, 2009]
For a CPRS to be passed there needs to be political negotiation rather than this political posturing. The Greens in their recent failed election campaign in Higgins By-election released a Galaxy poll that they had commissioned that shows that 69% of Australians would prefer the Greens to negotiate with the Labor Party on the CPRS [from the Greens Higgins by-election campaign website]
The Greens have said that they want a much tougher CPRS with higher limits, tougher restrictions and bigger costs to industry, but they are not prepared to see the Federal Government's first step version succeed. If a CPRS is to be accepted by the Australian people, and importantly, by Australian industry delivering Australian jobs, then we need to move forward together - taking it one step at a time.
It is better than where we were before"
- Greens Senator Christine Milne
Earlier in the year the Greens voted with the Rudd
Government on the landmark Renewable Energies Target legislation. When asked why the Greens had voted for a renewable energy scheme that she claimed 'to be disappointed with', Senator Milne said 'a flawed model was a start'. [from 'Clean Energy Laws Pass Parliament', AAP August 20, 2009]
We need to build a nation of the future with sustainable jobs and lifestyles by employing technologies and systems to make a low carbon transformation go hand in hand with a strong economy. The Greens seem to have forgotten about the rest of the country that still relies on our traditional commodity based industries to survive.
Despite what the Greens say, we can't all take up low-impact jobs today,
a demand for them needs to be created by a stimulated business sector first.
It is true that there are 'no
jobs on a dead planet' but
a country without
jobs, without a population able to financially support social, health and
education systems, a nation without an ability to grow food, build shelter
or generate power is also dead.
SO WHAT DO GREENS VOTERS THINK?
The McNair Gallup Poll in August 2009 shows that 40% of Greens voters are in favour of the proposed CPRS with only 27% of Greens voters opposed to it.
WHAT IS A DOUBLE DISSOLUTION?
A double dissolution is a procedure permitted under the Australian Constitution to resolve deadlocks between the House of Representatives and the Senate.
On the occassion that a bill passed by the lower house is rejected twice by
the Senate (or passed with ammendments unacceptable to the lower house),
Section 57 of the Constitution allows the Governor-General to dissolve the
House of Representatives and the entire Senate and issue writs for an election
in which every seat in the Parliament is contested.
This means that the ENTIRE senate (rather than the usual half senate)
is put to election.
In a half senate election the quota for electing a Senator
in each state is 14.3% of the vote (6 Senators per state). In a full senate
election this is reduced to 7.7% (12 Senators per state). In states where the
Greens have failed to achieve quota for one Senator at the last election (NSW,
Victoria, Queensland), they may actually increase their numbers.
So a double dissolution would benefit the Greens' electoral prospects.
Section 57 also provides that, following the election, if the Senate again rejects the bill or bills that were the subject of the double dissolution, a joint sitting of the two houses is convened to vote on the bills in question. If the bill is passed by an absolute majority of the total membership of the joint sitting (the lower house has twice as many members as the Senate), it is treated as though it had been passed separately by both houses.
The Greens have written to the Prime Minister asking him not to call a double dissolution election based on the CPRS. A 'Climate Change Election' would probably elect more Greens Senators (based on the lower quota in each state), and the CPRS bill would also be able to be passed by the combined sitting of both houses of Parliament - IF the Labor Party was re-elected as the Government in the lower house to put it forward.
BUT the prospect of the Liberal Party with it's current John Howard
era policy positions of doing very little on Climate Change being elected
would most likely be the death knell for a CPRS for at least the following
3 years.
This is a dangerous game for the Greens to be playing with our future.
You should be asking the Greens Senators, Victorian Greens MPs, even your local Greens Councillor why they are not supporting this important first step in dealing with Climate Change.