Australian prime minister Malcolm Turnbull has publicly ruled out the idea of using a carbon tax or emissions trading to reduce greenhouse gas emissions. He cited concerns about raising prices for consumers, saying he would not do anything that would raise prices when many Australians are already struggling. Just one day earlier, the country’s electricity and gas transmission industry called for the government to impose a carbon trading scheme in the national market by 2022. Their report argued that this would be the least expensive way to reduce carbon emissions, and that by 2030, it could even save customers about 200 dollars a year.
The move comes just days after environment minister Josh Frydenberg backed down from his position that a government review would consider an emissions trading scheme, after opponents made it clear they would oppose such a measure.
On Wednesday, Frydenberg said to reporters:
“I have a position which is very clear, that we will not be adopting an emissions intensity scheme. We won’t adopt an ETS. We won’t adopt a carbon tax. Whatever way you like to call it. What I am focused on is getting this review to look at how we meet our 2030 targets and we have a range of mechanisms in place.”
Frydenberg spoke to the press just 20 minutes after Turnbull called on him to explain his conflicting statements.
“I have just spoken to the prime minister and I saw that press conference,” he said. “It was very clear what the government’s position is, and was, namely, that we wouldn’t be putting in place a carbon tax or an emissions trading scheme.”
Director of the Grattan Institute’s energy program, speaking on ABC radio, said that the minister’s backdown showed that Turnbull’s government had painted itself into a corner regarding climate change. He said that it would be impossible for the government to make its emissions targets without setting a price for carbon. He said an emissions intensity scheme, or other trading scheme, would cheaply reduce emissions.
He explained, saying:
“An emissions intensity scheme is not a tax. The basic idea is that you will reduce emissions, and in the case of an emissions intensity scheme, if people don’t produce emissions above their baseline, which is the way the scheme’s designed, they don’t have to pay for it. So there’s no revenue there to be secured by the government if people don’t do what they have to do. So it’s not a revenue-raising scheme like a tax is.
“It’s somewhat ironic that the outcome could be that we end up with a third- or fourth-best policy, and we end up with exactly the opposite of what those who are opposing these schemes would like to achieve – which is we end up with more uncertainty and even higher prices. I think what’s happened now is 2017 just became a lot harder for minister Frydenberg.”