Isramart :Carbon trading controversy in Canberra

Isramart news:
Australian power generators have threatened legal action if the government does not dramatically increase the level of compensation in its proposed carbon emissions trading scheme.

The government hopes this week to have its amended carbon trading proposal passed into law, ahead of next month’s Copenhagen summit on climate change. Canberra is locked in late-stage talks with the opposition Liberal party, which blocked the original emissions plan’s passage earlier this year over increasing compensation for the generators after agreeing to exclude agriculture for an extended period.

Andrew Brandler, chief executive of Hong Kong’s CLP, told the Financial Times that the level of free permits granted to generators in Australia proposed by the government should be tripled, while a proposed five-year compensation scheme should be extended to at least 10 years.

He said CLP, one of the region’s biggest energy groups and owner of Australian power stations, had publicly raised the prospect of legal action in a “last-ditch effort to make clear to the government we will not take this lying down”.

CLP argues the emissions plan risks breaching Australia’s investment treaty with Hong Kong “exposing [Canberra] to a claim of many hundreds of millions of dollars” in the event the company’s investments are not “properly treated”. CLP said if laws to cut carbon emissions led to a fall in the value of its Australian assets it would seek to recover losses.

The Australian head of International Power, the UK energy group, has also threatened the group would quit the Australian market if the government did not offer additional compensation. The UK group, which operates a coal-fired power station in Australia, is reviewing its legal options and has warned of the possible collapse of the electricity market along the country’s urban east coast in the event it and others left.

John Connor, chief executive of the Climate Institute, an independent research group, said the generators were running a scare campaign. He said: “They bought these brown coal-fired generation companies in the last decade and should have anticipated a carbon price was coming.

“This is their last-gasp throw of the dice to get multi-billion dollar rewards if the government crumbles [on compensation],” he said, adding that the generators were hoping to secure massive handouts at taxpayers’ expense.

The government’s proposed scheme to generators is worth A$3.5bn (US$3.2bn) but that could double if amendments between it and the Liberals were agreed.