Australia to unveil carbon price scheme this week

After much debate, Australia is expected this week to reveal its carbon price scheme putting a tax on emissions and outlining a transition to emissions trading around 2015, according to Christine Milne, deputy leader of the Greens Party.

“Certainly we have pushed not only for an emissions trading scheme, but a broad package, and that will be released later in the week,” Christine Milne told Australian television.

She also backed the news that the minority Labor government had agreed to set up a multibillion-dollar fund to support renewable energy investment. A report in the Sydney Morning Herald newspaper said that the Greens had negotiated a fund to invest in renewable energy. This would be financed by the proceeds of carbon pricing and have up to AUD2bn annually available.

“What we’ve said is there needs to be a package that has in it an emissions trading scheme, but also has a range of complementary measures, because we know that the carbon price won’t be high enough to drive the roll-out of large-scale renewables (projects) in the timeframe that we need them,” Milne said.

With uncertainty over the fate of the policy affecting investment decisions, particularly in the coal-fired power industry and in renewable energy and plantation forestry, progress on the scheme is considered a key step.

The minority Labor government plans to impose a tax on carbon emissions from mid-2012 as a transitional step to a carbon trading system, which will see the country’s top 1000 polluters being required to buy carbon permits on an open market.

Negotiations have been carried out for months with two independent lawmakers, who back Prime Minister Julia Gillard in the lower house and the Greens, who control the Senate. A plant to cut carbon emissions foundered in 2009 under Greens opposition in the Senate who considered the 5% cut by 2020 from the 2000 baseline too low. Julia Gillard has seen her popularity nosedive due to public fears over the cost of driving as a result of the scheme although on Sunday she promised petrol to be exempt for most motorists.