Austraila Delays Emissions Trading Scheme

Australia has postponed the implementation of its proposed emissions trading scheme until 2012 at the earliest, according to news reports.

In justifying the postponment, Prime Minister Kevin Rudd said that by 2012, when the current Kyoto deal expires, governments around the world would need to make clear their new carbon reduction commitments.

Kevin Rudd has been under significant pressure from within Australia and in particular from Tony Abbott, the leader of the opposition Liberal Party.

Australia's move follows on from the uncertainties over the Cap and Trade bill in the US, which has slipped down the political agenda in recent months. These moves leave Europe increasingly isolated on the issue and has led to some member states questioning the wisdom of unilateral action on climate change. Other member states have suggested the imposition of carbon taxes at Europe's borders, to protect the competitiveness of Europe's industries.

This blog continues to argue that all manufacturing industries need a strong sustainability agenda, with increased use of renewables and a strong focus on new technologies to reduce energy consumption and waste. Government support should be for the development and implementation of such technologies, rather than trying to implement regional schemes which will do little to drive a global improvement in energy efficiency but which will lead to relocation of manufacturing plants and jobs.

As for carbon taxes, they are highly complex to implement, given the range of products to which they will need to be applied. They are virtually impossible to link back to energy efficiency and will be ultimately passed on to the consumer, thereby driving inflation.

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