Emissions Trading Scheme (ETS)
formerly CPRS - Carbon Pollution Reduction Scheme
The Government is strongly committed to reducing Australia’s carbon pollution. The Carbon Pollution Reduction Scheme (CPRS) is the main driver to achieve this important environmental goal. When it commences on 1 July 2011, it will guarantee that Australia meets its expanded emissions reductions of as much as 25 per cent of 2000 levels by 2020.
As a market-based solution, the Scheme is the lowest cost way to reduce emissions. A range of measures will be put in place to assist business and households to adjust to the carbon price. It will protect the jobs of today while encouraging the jobs of the future. These measures will include Emission–Intensive, Trade–Exposed assistance, the Electricity Sector Adjustment Scheme and the Climate Change Action Fund.
2020 target range
The Government has already set challenging targets for reducing Australia’s national emissions. The ambitious target range of 5–15 per cent on 2000 levels, which was announced in the Carbon Pollution Reduction Scheme White Paper in December 2008, involves reducing the carbon emissions of every Australian by at least a third over the next decade.
The Government’s assessment in the White Paper was that achieving global commitment to achieve emissions reductions sufficient to stabilise at 450 ppm CO2-e appeared challenging in the near term and that the most prospective pathway to this goal would be to embark on global action that reduces the risks of dangerous climate change and builds confidence that deep cuts in emissions are compatible with continuing economic growth and improved living standards.
The Government’s new commitment of 25 per cent below 2000 levels by 2020 follows extensive consultation with environment advocates on the best way to maximise Australia’s contribution to an ambitious global outcome. It also reflects that international developments since December 2008 have improved prospects for such an agreement.
Nevertheless, achieving this will still be very tough. It will require a significant further shift in negotiating dynamics and all advanced and major developing economies to take serious action to restrain and then reduce emissions. Australia’s conditions for adopting a 25 per cent target are set out below.