Australia’s Flawed Cap and Trade System Postponed Until 2011, Maybe Forever

Australia's messy battle over its unpopular climate law, the Carbon Pollution Reduction Scheme (CPRS), has finally come to an end – well, for now.

Prime Minister Kevin Rudd today pushed back the scheme's start date one year, to July 2011, due to hyper-partisan bickering. The delay guarantees there will be no climate action in Australia until July 2012, at the earliest. Truth is, it remains unclear whether the law will ever pass – and whether it even should.

Rudd and his center-left Labor party have stuffed it full of concessions to big polluters – though of course the prime minister is spinning it differently. He called the new scheme a "slower start" but with better "green outcomes." That's a stretch, to say the least.

Originally, the CPRS pledged to cut carbon emissions by a feeble 5 percent from 2000 levels by 2020, with a stipulation that the target would rise to 15 percent if the world comes to an ambitious agreement at Copenhagen in December.

The new scheme keeps that anemic bottom goal. The upper limit would increase to 25 percent below 2000 levels in the event of a global deal.

Science dictates far more – a reduction of 25 to 40 percent below 1990 levels by 2020, according to the IPCC's conservative estimates. Needless to say, the Greens, who want an unconditional 25 percent cut by 2020, weren't impressed with Rudd's "pay off:"

The decision to lift the upper limit was an "almost irrelevant green distraction," Greens senator Christine Milne said. "If you add a little bit of green to brown, you still get brown."

The prime minister has publicly blamed the financial crisis for the delay. But the reality is, the scheme never had a prayer of passing the Parliament. It had no friends, none at all.

With time, it became clear that the prime minister was more willing to compromise away his party's positions to conservative factions than to risk the death of his centerpiece legislation. And that's exactly what he did – over and over. Just look at the changes made this week:

• The price of carbon will be fixed at the bargain price of $10 a ton for the first 12 months. (The original scheme had capped the price at a maximum $40 a ton, but did not fix a price.)
• The government will increase the number of free permits to major polluters under what it calls a "global recession buffer." Specifically:
  • Industries originally eligible for 90 percent of free permits will now receive 95 percent of permits for free in the first year.
  • Industries originally entitled to 60 percent of free permits will receive an extra 10 percent in the first year.

So far, these polluter hand-outs aren't helping Rudd in the least. Powerful opposition leader Malcolm Turnbull, head of the center-right Liberal Party, declared an immediate "no" to today's revisions, even though he asked for them:

"On the basis of what we've seen today, no we wouldn't support it."

It seems Rudd has been "mugged by reality." So writes the Sydney Morning Herald. How true that is.

The prime minister was elected on a platform of ending Australia's legacy of climate change intransigence. He set the world ablaze with his passion, after signing the Kyoto Protocol as his first action in office. And he pushed hard for a strong national climate law for the first time in Australia's history.

Quickly, though, his scheme devolved into a partisan plan packed with polluter giveaways. Even professor Ross Garnaut, the respected Australian scientist who helped construct the CPRS, blasted it at a hearing this month. He said it was now a "lineball call" whether the scheme should be revamped or killed altogether.