Business backs Climate Change Authority’s push for market-based emissions trading scheme

Australia's Minister for Resources, Energy and Northern Australia Josh Frydenberg participates in a swearing-in ceremony at Government House in Canberra, Australia, September 21, 2015. Reuters/Stefan Postles/Pool

Australian businesses are backing the call by the Climate Change Authority (CCA) to introduce a market-based emissions trading scheme. However, Energy Minister Josh Frydenberg rejected the proposal, insisting that the country is on track to beat its 2020 emissions target by 78 million tonnes.

The CCA released on Wednesday a review of the country’s climate change policy, advising the Turnbull government to put in place two emissions trading schemes and strengthen regulations to meet Australia’s 2030 emissions targets. The review was commissioned by former Environment Minister Greg Hunt which Frydenberg says was part of the deal with the Palmer United Party to scrap the carbon tax, reports The Guardian.

On Thursday, Jennifer Westacott, chief executive of the Business Council of Australia, supported CCA’s recommendation to use the existing Direct Action framework of the Coalition to move toward a lower-emission future. “We need a suite of durable, post-2020 climate change policies that are capable of delivering Australia's emissions reduction targets at lowest possible cost, while maintaining competitiveness and growing Australia's future prosperity,” Australian Financial Review quotes Westacott who says the country does not need to begin another climate change policy.

The business and energy sectors believe a market-based scheme would help Australia meet the UN target of reducing emissions by 26 to 28 percent by 2030. Frydenberg says no changes are needed until a review of the policies are done in mid-2017.

Australia is on track to meet the country’s 2020 target of a 5 percent cut by 2000, but the country’s emissions target has been criticised as not enough to meet the UN target of 26 to 28 percent emissions reduction by 2030.

Frydenberg insists the country is witnessing a dramatic transition in the energy market as it transitions to a lower-emissions future with its policies in place. On Friday, the Turnbull government would announced the initial $10 million seed funding of a $1-billion Clean Energy Innovation Fund to boost the nation’s renewable energy credentials.

VIDEO: How does the emissions trading scheme work?