Sue Lannin reported this story on Wednesday, December 2, 2009 08:11:00

TONY EASTLEY: An adviser to the Rudd Government on emissions trading has welcomed the election of Tony Abbott as Opposition Leader.



Company director Dick Warburton is a former Reserve Bank board member who chairs an advisory committee on aid to industries affected by carbon trading.



He thinks the Government's emissions trading scheme is compromised and instead he wants to see a carbon tax introduced.



Mr Warbuton told finance reporter, Sue Lannin, the Coalition's about face on the ETS will allow for more public debate.



DICK WARBURTON: I believe there's been an appalling lack of debate on the two key issues in this whole area. One issue is being the cause, what is the cause of the climate change? There's no doubt there is climate change. To say that there's not you'd be living in fool's paradise.



On the cause there's huge debate about whether carbon dioxide is the main cause. We've had no debate, virtually no debate on the ETS versus the carbon tax. There's been individuals putting their point of view but no debate.



So I am pleased if this comes about that it would lead to some good open debate on those two issues - the cause and the solution.



SUE LANNIN: But there has been several years of debate. The Howard government decided to go ahead with the carbon trading scheme, it's taken a couple of years for the Rudd Government to get their scheme up. How can you say there's been no debate?



DICK WARBURTON: Well the debate has been purely on a political level and has been mandated at the political level and it's been a case of, say with the ETS for example, there's been a huge change from when Howard introduced it. In those days it was stated that one of the best things is you have a pure ETS system. We haven't got a pure system now. It is a completely compromised system.



Secondly on the debate side, the educational aspects of the public has been so poor that the people just don't understand what it is.



SUE LANNIN: Do you think the Rudd Government has made a mistake by giving away billions of dollars in compensation to the big polluters?



DICK WARBURTON: Well it strikes me as very strange that they would do that. I mean one of the things that you want to have with a scheme like this is that people do suffer a bit of pain and that sounds a bit grim but that's how you get inducement to change and come up with better solutions.



But if you then, if someone says, just look, I've got some pain, OK we'll give you some more money, then you're not achieving what you set out to do.



So yes, I do find it a bit strange.



SUE LANNIN: You support a carbon tax. Why do you think that would be a better system than a carbon trading scheme?



DICK WARBURTON: Because the science is not settled, then I don't believe we should be going into a scheme which is virtually irreversible once it starts, because once it starts it will be almost impossible to unravel the financial derivatives, the rights particularly, therefore you better go to a scheme that can be changed if the science moves one way or the another, and the carbon tax would do that.



Secondly, the carbon tax is a much more transparent, is much more direct, is much more flexible type of system and with the completely compromised ETS I believe it's now turned out a better solution.



SUE LANNIN: By saying that the science is not settled, isn't business just trying to delay a scheme even further?



DICK WARBURTON: Well I don't know that business is. Business is quite happy to go ahead with a more certain scheme as I've heard. It's far better to get certainty of a good process than to get certainty of a bad process, and that's what I think we're looking for to get the debate going.



TONY EASTLEY: Businessman Dick Warburton ending Sue Lannin's report.