Emissions trading: the case for delay
letter published in The Age and also The Australian, 22 Sept 2008
The current US financial crisis will have global effects and, while the balance sheets of the Australian banks are in better shape than those of counterparts, those effects will spillover and have adverse effects on Australia's economic performance, including the capacity of Australian businesses to obtain finance for both running costs and investment projects. Prime Minister Kevin Rudd has indicated that during his forthcoming visit to the US he will be discussing with top US and UN officials the economic outlook, including the implications for next December's Copenhagen conference on climate change and a global emissions trading scheme.
It is to be hoped that, as a result, the Prime Minister will carefully re- assess his current policy of commencing an Australian ETS in 2010. Such a scheme will require major structural changes in the Australian economy and businesses should not be asked to start effecting such changes in economic circumstances that are almost certainly going to make it extremely difficult for them to assess the likely demand for their products.
In short, Australian businesses should not be subjected to a double-whammy of a likely world recession or major slow-down and the need to start adjusting to an ETS. There is now a strong case for postponing the commencement of any Australian ETS until after 2010.
Des Moore
Director, Institute for Private Enterprise,
South Yarra Vic