It is interesting to observe how an economic downturn can cause bold plans for combatting carbon emissions into mild-mannered ones. The Australian government has now released its plans for an emissions trading scheme, and the new plans are starting to look quite similar to those of the former government. The new scheme is designed to be relatively painless, and the likely result of little pain is little improvement.
It is predicted that the emissions trading scheme will result in price rises of about 1%. Power stations which use coal will be compensated for loss of asset value, and other businesses which are heavy carbon-emitters will receive permits. All money raised from the scheme will be returned to households and businesses, so that almost nothing will be left over to help solve climate change problems by funding research and development of carbon-free technology or to help developing countries address climate change.
According to the Treasury estimates, the scheme will require about 1000 firms to buy emission permits, raising $23.5 billion over the first two years. Of this, $9.9 billion will be used to increase benefits for low income earners, $4.4 billion will be used to cut petrol taxes, $6 billion will be used to compensate businesses that are heavy carbon-emitters, $1.4 billion will compensate coal-fired power stations, and $1.7 billion will go to a climate change action fund.