By Angela Macdonald-Smith
April 28 (Bloomberg) -- Australia’s planned carbon trading system risks the viability of some of its largest exporters and employers and acts as a A$2.5 billion ($1.8 billion) “de- stimulus package,” the nation’s biggest steelmaker said.
The proposed system has “obvious and serious flaws” and may cost “many thousands of Australian workers” their jobs, Graham Kraehe, chairman of Melbourne-based BlueScope Steel Ltd., said today.
Australia’s draft regulations for the trading system propose 90 percent free permits for industries such as steelmaking that are emissions intensive and face competition from rivals that don’t pay carbon costs. Yet the effective rate of free permits is likely to be as low as 58 percent, Kraehe said today, without elaborating.
“The Australian economy will survive the economic downturn but it may not survive the” emissions trading system, Kraehe said in an address in Brisbane, a copy of which was e- mailed to Bloomberg. BlueScope’s board can’t commit to a proposed investment of more than A$1 billion in an emissions abatement project under the draft regulations, he said.
The carbon trading plan is due to start on July 1, 2010. It’s intended to help Australia reach a target of cutting greenhouse gas emissions, blamed for global warming, by between 5 percent and 15 percent of 2000 levels by 2020. The government has a long-term target of reducing emissions by 60 percent by 2050.
To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net
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