2.120 The committee notes that the Treasury
modelling was conducted in economic circumstances that were markedly different
to those in which the legislation is proposed to now be introduced. Since the
modelling was conducted the global financial crisis has led to a marked
deterioration in the short-term economic outlook.
Whilst the CPRS package has been revised on two occasions, the
modelling continues to fail to take into account the impact of these changed
economic circumstances. The committee considers the modelling undertaken by
Treasury to be inadequate and recommends that the Government direct Treasury to
undertake further modelling. The further modelling should:
in detail the short-term adjustment costs;
to criticisms made of Treasury's initial modelling including:
into account the deterioration of the Australian economy
likely effect of the CPRS upon jobs and upon the environment
absence of any modelling of the impact of the CPRS on regional Australia; and
other types of schemes that have been proposed as alternatives to CPRS,
conventional baseline-and-credit scheme
consumption-based carbon tax, and
McKibbin hybrid approach.
4.41 The committee recommends that the CPRS
legislation not be passed in its current form.
5.89 The committee recommends any remodelled CPRS
legislation clarify future arrangements to provide continued support for
methane gas capture and energy generation following the foreshadowed cessation
of state based schemes.
5.90 The committee recommends that the Government
work with the NSW, ACT and Queensland governments to clarify, as a priority,
transitional arrangements for power generation projects from waste methane
which may be affected by the possible cessation of the NSW GGAS and similar
5.141 The committee recommends that the Government
consider in detail different claims made about the probable expense of the
expanded Renewable Energy Target. Analysis of the different cost estimates
should be included in the Regulatory Impact Statement (RIS) accompanying the
legislation to amend the Renewable Energy (Electricity) Act 2000.
5.142 The committee recommends that following the
decision by COAG on 30 April 2009 to exempt major emitters, the Government
should explain in the RIS accompanying the amendment bills:
any differences in costs caused to
householders and other industry sectors arising from the decision;
the impact the exemptions will have on the
efficiency and effectiveness of the scheme; and
the form which compensation to
householders will take.
6.64 The committee recommends the Government review
the impact of the CPRS to avoid the EITE provisions generating perverse
outcomes for the agriculture sector and the food processing and manufacturing
sector such as scaling down and splitting operations.
6.68 The committee recommends that, as a priority,
the Government develop complementary policy measures for greenhouse gas
abatement and mitigation in the agricultural sector; and that such policy
measures be underpinned by substantially greater research and development in
6.69 The committee recommends that the Government
establish an agriculture and land use policy taskforce to accelerate the
development of complementary climate change policy measures for the land use
sector; and to promote full carbon accounting in land use, agriculture and
forestry sectors in international climate change fora.
6.105 The committee recommends that the Government
promote the testing, development and roll-out of environmental restoration and
land stewardship schemes, giving priority to schemes that can make a
significant contribution to emissions reductions, agricultural productivity and
6.139 The committee recommends that the Government
promote the testing, development and roll-out of soil carbon technologies and
schemes, giving priority to schemes that can make a significant contribution to
emissions reductions and soil health.
6.164 The committee recommends that the Government
takes steps to ensure that Australia encourages reform of international carbon
6.165 The Committee recommends that the Government
provide greater funding so that recommendations 8, 9, 10, 11 and 12 can be implemented
in a timely manner.
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