The Federal Government has released its Green Paper on a carbon emissions trading scheme with a pledge to help low-income families and industries sensitive to the scheme.

But the launch of the Green Paper for a Carbon Pollution Reduction Scheme, was criticised for not going far enough to encourage the widescale changes required to deal with climate change. 

Launching the Green Paper, Senator Penny Wong, the Minister for Climate Change and Water, revealed the Government would soften the blow to low-income households, likely to be most affected by rising energy prices, and would issue free trading permits to the worst hit industries such as alluminium and cement.

“We confront a daunting reality: we cannot continue to pour carbon pollution into the atmosphere as if there is no cost,” Senator Wong told the National Press Club in Canberra.

“As one of the hottest and driest continents on earth, Australia’s economy and environment will be one of the hardest and fastest hit by climate change if we don’t act now.

“The Carbon Pollution Reduction Scheme is a response to climate change that is economically responsible, supports families and prepares Australia for our future challenges.”

However the Green Paper gives no firm commitment to a start date for the trading scheme, but an "intention" to start-up in 2010. The paper also estimates that an average impact on inflation on a $20 carbon price would be a 0.9 per cent rise once the scheme started.

Responding to the launch the shadow Treasurer attacked the trading scheme as being light on economic detail and criticised a planned delay in the Treasury’s economic modelling – which would detail the full economic implications of the trading scheme – until after submissions have been received on the Green Paper.

“This is a most extraordinary Green Paper," shadow Treasurer Malcolm Turnbull told ABC radio.

“It’s asking households, individuals, businesses to make submissions to the Government about that scheme in total ignorance of what the Treasury thinks."

The Government’s plan for a Carbon Pollution Reduction Scheme was also criticised for its lack of support to the renewable energy sector and for not doing enough to encourage businesses to reduce carbon emissions.

Greens senator, Christine Milne, said the proposals for the scheme would not get households or business to change their behaviour.

"Giving free permits for the aluminium sector and other trade-exposed industries out to 2020 and beyond sends absolutely no signal for those industries to reduce their emissions," she said.

"Protecting the coal generators and subsidising geosequestration is a decision to lock renewable energy out of Australia."

The Business Council of Australia President Greig Gailey said: "All long-term solutions to climate change will involve the transition from a high- to a low-emissions global economy. No-one should be under any illusion about the enormity of the task or about the availability of a quick fix.

"Getting the design right for an Australian emissions trading scheme is critical in terms of Australia achieving emissions reductions and to our economic future. This task is all the harder in the absence of a global response."
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