Oct 8 (Reuters) - An Australian senator released on Wednesday a proposal to penalise companies failing to meet carbon emission targets and give firms access to the international carbon market, in a move to try and break a deadlock in the country’s climate policy.
Australia’s conservative Liberal party government in July repealed a tax on climate-changing greenhouse gas emissions for its 350 biggest companies, claiming the scheme was too costly while achieving little in terms of emission cuts.
But the country, the developed world’s biggest carbon emitter per capita, has since been left without a climate policy because the opposition parties in the senate reject the government’s alternative plan.
Independent Senator Nick Xenophon, who has sought a key role in finding a solution to the climate policy stand-off, proposed amendments he said would put Australia back on track to meet its target of cutting emissions to 5 percent below 2000 levels by 2020.
It remains unclear, though, whether Xenophon will win enough support to get his proposal through both houses of parliament.
“There is yet to be formal agreement on these amendments, but I believe they are a realistic and achievable set of proposals,” said Xenophon in a statement.
Among Xenophon’s key proposals is creating a legal framework meant to ensure Australia’s biggest emitters would meet emission baselines set by the government, for example by making violators buy carbon credits, either domestic or international.
Xenophon proposed Australia could set aside up to A$500 million ($440 mln) to buy international carbon credits issued by the United Nations.
The cheap U.N. credits, currently trading in the European carbon market at around 11 euro cents ($0.14), would ensure Australia met its international carbon target, and could be bought by firms failing to meet domestic targets, the senator said.
In comparison, the government’s A$2.55 billion Emission Reduction Fund to buy emission cuts from companies that emit below baselines set by government, has not proposed specific sanctions against emitters missing targets.
The government has also so far rejected using foreign carbon credits, causing a number of studies to conclude that the A$2.55 billion would not be sufficient to meet the target.
Xenophon also proposed to prolong the contract periods for domestic emission reduction projects to seven years to create greater security for project developers.
“If a number of the changes proposed by Senator Xenophon are adopted it would significantly increase the prospect of the government’s policies being able to meet our international emissions reduction targets,” said Peter Castellas, CEO of industry group Carbon Market Institute. (Reporting by Stian Reklev in BEIJING; Editing by Muralikumar Anantharaman)