Party says allowing heavy polluters to use international permits to meet emissions reduction targets allows companies to ‘keep polluting at home’

This article is more than 1 year old

This article is more than 1 year old

The Greens are positioning to torpedo a key element of Labor’s new climate policy in the event Bill Shorten wins the federal election in May, telegraphing strong opposition to heavy polluters using international permits to meet their emissions reduction targets.

The thumbs-down from the Greens, who will likely be the critical Senate bloc post-election in the event of a Labor victory, comes as the politically influential motoring lobby has also signalled it will push back on Labor’s proposal to introduce vehicle efficiency standards for light vehicles that would bring Australia broadly into line with carbon pollutions standards for cars in the US.

The Australian Industry Group, which represents some of Australia’s heavy emitters, also argued the 45% emissions target proposed by Labor would represent a “heavy lift” for many parts of the economy and “would be workable only if they were delivered in tandem with commitments to avoid trade distortions, allow many sources of flexibility and facilitate major low-carbon investments”.

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Labor on Monday, on budget eve and only days before the calling of the election, unveiled the final tranche of its climate policy. The policy includes more stringent pollution-reduction requirements for heavy industry, a new vehicle emissions standard imposed on car retailers, and new targets to increase the share of electric vehicles in the transport fleet.

The Morrison government went on the political offensive immediately, likening the measures to a carbon “tax”. The prime minister claimed Labor’s beefed-up pollution requirements for big emitters would force companies to purchase international carbon credits, “sending money offshore to foreign carbon traders – carbon credits from Kazakhstan”.

The Greens’ climate spokesman, Adam Bandt, used similar language to Morrison: “We cannot outsource our emissions reduction obligations to a pig farm in Ukraine.”

Bandt said international offsets were “fake action because Australian polluters will buy overseas permits from other countries but keep polluting at home. International offsets delay climate action in Australia. More coal will be burnt at home and the transition to 100% renewables will be delayed”.

Labor defended the decision to deploy permits as part of the abatement options. The shadow climate change minister, Mark Butler, said the government needed to explain why it supported Australian businesses trading in international markets, but not international carbon markets.

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“What we need are cuts in pollution, whether they are from the Australian carbon farming sector or overseas robust credible markets or the electricity sector – the important thing is for cuts in pollution to be achieved … in the most cost-effective and efficient manner possible,” Butler said.

A pitched backroom lobbying campaign has prevented governments imposing vehicle emissions standards in Australia for years. The Australian Automobile Association warned on Tuesday “a poorly designed standard will drive up the cost of cars”, despite government modelling indicating vehicle efficiency standards would actually deliver billions of dollars in fuel savings for consumers.

Labor has proposed a pollution regulation that will bring Australian cars in line with 105g of carbon dioxide per kilometre, but will consult on the timeline for phasing in the change.

The AAA remains opposed to a model that would mirror standards in the European Union or the US and has successfully argued for years that the needs of Australian drivers are unique.

On Monday the AAA said it supports the introduction of an emissions standard that recognises the “unique needs and preferences of Australian motorists”, but that a “poorly-designed standard” would drive up the cost of cars and petrol.

The issue of vehicle efficiency standards has been politically toxic, with attempts by the current government to introduce them derailed by the National party and the motoring and petroleum lobbies.

The consequence of that is Australia now lags behind the rest of the world in introducing standards that would help deal with the country’s second-highest source of emissions – the transport sector.

One motor lobby, the NRMA, has taken a different position to the AAA and says Australia is so far behind it will have to look at banning internal combustion engine vehicle sales within the next decade.

Labor has also proposed a national electric vehicle target of 50% of all new car sales by 2030.

Other industry groups on Monday said they wanted to see more detail on how the opposition plans to implement its climate policies if it wins government in May.

The Ai Group’s chief executive, Innes Willox, said proposed pollution requirements for different sectors under a beefed-up safeguard mechanism would need to be achieved through low-cost abatement anywhere in the domestic economy, as well as through credible international options.

He warned assisting industries exposed as a result of the transition to a low-carbon economy could be difficult when many currently weren’t defined as emissions-intensive, trade-exposed industries under government arrangements. Willox also said that options for low- and zero-carbon transition in industry needed to be more tangible.

“The proposed Strategic Industries Fund could be useful, though important detail is lacking on coverage, level of matching and more,” Willox said.

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“In short, we should not underestimate how difficult the trade-offs would be between the expectations of different industries and other stakeholders. Close consultation with the breadth of affected industries would be essential to deliver on such ambitious goals.”

Environment groups, meanwhile, said the package was a substantial step forward on climate but still fell short on issues including the need to replace coal-fired power and reduce deforestation.

Kelly O’Shanassy, the chief executive of the Australian Conservation Foundation, said: “There is still a cognitive dissidence in our national debate about the climate damage the coal we dig up and send overseas is causing. No party can claim to be truly serious on climate change until it stops Adani and develops a strategy to accelerate the transition away from coal.”

The Australia Institute’s Richie Merzian said the policy had the potential “to actually reduce emissions in line with a credible and achievable emission reduction target of 45% by 2030”.