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Calls for certainty in approach to greenhouse -

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Reporter: Oscar McLaren

ELEANOR HALL: While the Government says it scrapped its inquiry into the Emissions Trading Scheme
because it was creating confusion in the business community, the Business Council of Australia says
its members are working on the assumption the Government's carbon trading scheme will go ahead as
planned.

Oscar McLaren has been gauging reaction to the political infighting and filed this report.

OSCAR MCLAREN: The Rudd Government's emissions trading scheme has come under increasing attack from
both sides of the climate change debate.

Environmentalists say the targets for emissions reduction are too low to prevent dangerous climate
change and they've also criticised many of the concessions given to big polluters.

So the Liberal's promise to impose tougher targets has been welcomed by Tony Moore from the
Australian Conservation Foundation.

TONY MOORE: The biggest flaw with the proposal so far is actually the target, the emission
reduction target. The Governments proposal for a five to 15 per cent cut is simply too weak for us
to be even in the game internationally when reducing emissions.

We also need to make sure that we can improve the scheme over time and currently if there were
state governments or even a future Federal government that wanted to introduce new policy, it
wouldn't actually reduce Australia's emissions below the amount that has been put forward by the
Rudd Government.

OSCAR MCLAREN: Business groups maintain the Government's proposed scheme will put heavy burdens on
businesses at a time of economic uncertainty.

But Maria Tarrant from the Business Council of Australia says most businesses are already making
plans to accommodate it and the current discussion could be disrupting those plans.

MARIA TARRANT: People in all the business associations are really looking at crunching figures,
understanding where the regulations will take them being clear that they can get the data that is
required for consideration by the Department of Climate Change.

So yes, people are well past having the luxury for naval gazing and into getting the detail right.

OSCAR MCLAREN: The Government scrapped an inquiry into the Emissions Trading Scheme on the grounds
that the issue was becoming too complicated.

All the Business Council wants is certainty.

MARIA TARRANT: The challenge for us is to get the detail right in the CPRS (Carbon Pollution
Reduction Scheme). The Government has already made a decision about timeline and there is no doubt
that the more that we can sort that detail out and the more business is confident it understands
the implications of that and that it does not unduly impact on business capacity to perform, the
better it will be and it will aid the certainty.

OSCAR MCLAREN: Now that the very design of the scheme appears to be up for discussion, it's also
reignited debate about the best structure to use for reducing emissions.

Iain MacGill from the Centre for Energy and Environmental Markets at the University of New South
Wales says the experience of the European Union Emissions Trading Scheme, in place since 2005 -
offers little encouragement.

IAIN MACGILL: Our experience to date with emissions trading around the world is, well at best you
would say mixed. You know performance to date of the EU Emissions Trading Scheme which is the
largest in the world and has been going since 2005, by some measures to date it has actually been a
debacle.

OSCAR MCLAREN: Iain MacGill says the price of carbon in the European Union collapsed soon after the
introduction of the scheme, meaning that companies had no effective disincentive to pollute.

Many industries were also given free permits to compensate for a greater cost burden but that
didn't stop electricity prices for consumers from going up.

Most of that money went straight into the pockets of electricity generators.

The ACF's (Australian Conservation Foundation) Tony Moore says the proposed Australian scheme
design hasn't learnt the lessons from the EU.

TONY MOORE: In his report last year Professor Garnaut warned the Government against the interest of
businesses who aren't out there trying to maximise their profits as this scheme is introduce.

We have to make sure that the purpose of this scheme stays intact and that is to reduce our
national greenhouse gas emissions.

OSCAR MCLAREN: But he's also worried that the longer discussions take place - the harder climate
change will be to deal with.

TONY MOORE: There is certainly no reason why Australia can't set a strong emission reduction target
and a strong emissions trading scheme to achieve it right now. We can't afford to delay another
year and then another year after that.

If we go to the negotiations with a strong set of domestic policies, that will be respected by
other countries and it will inspire others to do the same.

But if we go with a half-baked or a watered down scheme, that can threaten the prospects of a good
international agreement.

ELEANOR HALL: Tony Moore from the Australian Conservation Foundation, ending that report from Oscar
McLaren.