Australia Won't Delay Carbon Plan on Credit Crisis

By Angela Macdonald-Smith

Oct. 30 (Bloomberg) -- Australia won't delay its planned introduction of carbon trading because of the global financial crisis, said Climate Change minister Penny Wong.

Delaying carbon trading would only increase the cost of tackling greenhouse gas emissions and harm investment, Wong said today at a conference on the Gold Coast, Australia. The government will consider economic conditions when setting targets for greenhouse gas reductions, she said.

The Australian government plans to start the carbon trading system on July 1, 2010, to help reduce greenhouse gases blamed for global warming. The treasury will release modeling today that estimates the cost to the economy of achieving various emissions reductions on the way to the government's long-term target of a 60 percent cut in greenhouse gas pollution by 2050.

``A delay would have a greater cost to the economy than putting in place market reforms now,'' Wong said. ``The government will obviously take into account current and short- term economic circumstances as well as this long-term economic evidence when we make our decisions at the end of the year'' on reduction targets, she said.

Introducing emissions trading will place a cost on carbon pollution in Australia for the first time. Australia's emissions-intensive industries such as liquefied natural gas producers and oil refiners are opposing the proposed design of the trading system, saying they will be disadvantaged in comparison with rivals in Asian nations that don't place a cost on carbon emissions.

Maintaining Growth

The modeling to be released today by the federal treasury shows that Australia can reduce carbon emissions while still continuing to grow the economy and incomes, Wong said. Delaying the start of carbon trading would also harm investment by business because of uncertainty, she said.

Many industries will benefit from placing a cost on carbon, Wong said. By 2050 Australia's alternative energy industry will be as much as 30 times larger than it is today, she said. Establishing a carbon trading hub in Australia would have a ``significant value to the economy,'' she said.

The government will also consider the state of international negotiations for a global emissions reductions target when setting its emissions goals, the minister said.

Australia's economy will benefit more than other countries by acting early to reduce carbon emissions, Treasurer Wayne Swan said today.

Modeling on the impact on the economy of reducing carbon emissions shows ``costs for economies that act early are 15 percent lower than countries that wait for the world to act together,'' Swan said in notes of a speech to be delivered in Brisbane.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net