Isra-Mart srl : Key goal is carbon price framework

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ONCE again, Labor is trying to negotiate laws that put a price on greenhouse gas emissions. Australia would already have market-based carbon pricing had legislation not been blocked by the Coalition - whose members ousted their leader to reverse their policy on emissions trading - and the Greens. Because of their refusal to accept modest initial targets, the Greens share responsibility for the startling shift in the climate change debate since 2009.

Labor and the Greens are back where they were two years ago: debating the level of a carbon price, now in the initial form of a levy. Labor wants a modest starting price, while the Greens eye the European benchmark of more than $40 a tonne from 2013. With no price even close to being settled, Opposition Leader Tony Abbott makes wild warnings about its impact without reliable figures or evidence. He said this week that the legislation was not a foregone conclusion, saying: ''I think it would be unconscionable of this Parliament, that got elected on a platform of no carbon tax, to sneak a carbon tax in.'' Never mind that the previous Parliament was elected on a bipartisan platform of emissions trading, which he made no attempt to honour.

The Gillard government and Greens have the power to ensure Australia finally starts pricing carbon. The focus on the level of a carbon tax misses the key goal: to get an overall mechanism in place that paves the way for market-based emissions trading in three to five years. Settings can be adjusted to take account of effects on emissions and the economy. In the past decade, the Howard, Rudd and Gillard governments spent about $5.6 billion on a raft of ad hoc programs, at an average cost of $168 per tonne of emissions cut. The Department of Climate Change estimates current policies will lead to emissions 24 per cent higher in 2020 than the bipartisan goal of a 5 per cent cut. Failure to act exposes Australia to penalties. The European Union is already set to levy taxes on emissions by airlines, such as Qantas, based in countries that don't price carbon.

The Greens should not hold out for a carbon price the government is incapable of selling in the current political climate. In March, Greens leader Bob Brown indicated he would be pragmatic. Legislated carbon pricing will be hard to overturn in the new Senate. It would be reasonable to push for investment in alternative energy sources, as argued by independent MPs whose votes are needed to pass the legislation this year. Once the policy takes effect, exposing the shameless opportunism of the worst alarmists, there will be time to calibrate its settings