Isra-Mart srl: Labor way on carbon superior: NAB boss

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NATIONAL Australia Bank boss Cameron Clyne has gone further than his major bank peers by specifically endorsing the federal government's approach to carbon abatement over the Coalition's direct-action policy.

Mr Clyne told a Melbourne business lunch yesterday that Labor's plan to price carbon and then introduce an emissions trading scheme was "economically superior" and likely to free up investment bottlenecks.

"If you're asking for an economic assessment of the two (policies), the carbon price followed by an ETS is economically superior to the direct-action policy," the NAB chief told a lunch organised by the Committee for Economic Development of Australia. "It will drive certainty, it will drive investment, and so as a straight comparison between the two, that's the choice."

Mr Clyne, who is seen to be close to Wayne Swan, noted there was bipartisan agreement on the need for a 5 per cent cut in the level of 2000 emissions by 2020. The Coalition has put forward a direct-action policy, or targeted investment, to achieve the same level of abatement.

While other major bank chief executives, such as Westpac's Gail Kelly, have favoured a market mechanism to make the transition to a less carbon-intensive economy, they have stopped short of endorsing Labor's approach over that of the Coalition.

Mrs Kelly last month said that Westpac had traditionally been a supporter of an ETS. "A market-based mechanism is the best way to drive the innovation to new technology and new methodologies," she said. "A carbon price is one step towards an ETS and I think we need to remember it is only one of the solutions that you should be putting in place."

Also last month, ANZ chief Mike Smith said pricing carbon was critical to providing business certainty and unlocking sentiment. But Mr Smith said that, given the current reliance on high-emission products and services, the nation should be "under no illusion" about the scale, economic cost and complexity of transition.