Australia needs carbon market to meet target-study /// Reuters

 24 May 2010 08:32:21 GMT


Source: Reuters

SYDNEY, May 24 (Reuters) - Australia will not meet plans to reduce carbon pollution by 5 percent by 2020, based on 2000 levels, without a market system that puts a price on pollution, Australia's Climate Institute said on Monday.

The independent research body said a study it commissioned concluded that Australia would miss its target by a colossal 170 million tonnes if it failed to put a price on carbon pollution.

The projected shortfall represents nearly 30 percent of the country's carbon emissions levels in 2008 that totalled 581 million tonnes under Kyoto accounting rules.

Australia has also set a more ambitious 25 percent reduction target, conditional on global action.

But in the absence of a carbon price it would fall short of this target by 270 million tonnes, or almost half of 2008 levels, the study conducted by Bloomberg New Energy Finance (BNEF) found.

Australia's government last month put on hold an emissions trading scheme for at least three years, bowing to political reality that the scheme would not be passed by a hostile upper house Senate where it does not have a majority.

"Without a market mechanism to send a price signal that makes companies take responsibility for their pollution, Australia's pollution will be rising at a time when it should start falling," said Climate Institute Chief Executive John Connor.

He said even with a target of renewable energy meeting 20 percent of Australia's energy by 2020, carbon pollution would continue to soar without price signals and other policies to make businesses take responsibility for their pollution.

The BNEF study estimated that the renewable energy target would only cut Australia's emissions by 23 million tonnes by 2020 as the country would remain heavily reliant on low-cost coal-fired electricity generation without a carbon price.

(Reporting by Bruce Hextall; Editing by Ed Davies)