Support for trade exposed industries is reduced from a guaranteed ten years to five, with a clear intent to move to Professor Garnaut's ‘principled approach', as a result of the Greens' negotiations with the government and independent MPs for the pollution price announced today.

"Everybody acknowledges that trade exposed industries need assistance, but that assistance will now be increasingly underpinned by evidence instead of rhetoric to protect the status quo," Australian Greens Deputy Leader, Senator Christine Milne, said.

"Professor Ross Garnaut, the expert advisor to the MPCCC, was a highly valued source of advice on the questions of scheme design and his input was greatly appreciated."

Changes to the treatment of emissions intensive trade exposed industries (EITE) in the carbon price package include:
• Compensation will only be guaranteed at original levels for five years (instead of a ten year (5 plus 5 warning period) ‘minimum assistance period' under the CPRS).
• The Productivity Commission will be tasked with overseeing compensation to EITE with a clear view to moving towards the Garnaut-style principled approach as soon as possible (compensating trade exposed industries to the value of lost competitiveness, not lost profits). The Commission will report first by 2014-2015.
• Government can request an earlier review of industry sectors that are receiving the highest levels of compensation or are the fastest growing or if there is evidence of windfall gains.
• The Climate Change Authority will be consulted as to whether the compensation is supporting our ability to reduce emissions.
• The notice period required before reducing compensation rates in line with Productivity Commission recommendations (after 2014) has been reduced to three years, which can run concurrently with the five years guaranteed assistance.

"If Australia's emissions intensive industries want to be globally competitive into the future, they need to start investing now in becoming as efficient and clean as they possibly can.

"Shortening the period of guaranteed support to five years and holding out the prospect of Garnaut-style evidence-based assistance should convince forward-thinking industries to make that investment and protect the future of their business and their workers.

"Instead of a five year minimum assistance period followed by another five year notice period before any changes can be made, we will now have a three year notice period for changes that can overlap with the initial five year guarantee.

"The Greens acknowledged some time ago that it was not going to be possible to move to Professor Garnaut's principled approach straight away as the data needed to make that happen was simply not available.

"Requiring the Productivity Commission to oversee EITE compensation, including how much industries are cutting their emissions and what carbon price their international competitors are facing, gives us real hope that we can gather the necessary information over the coming years.

"The government has committed to moving to the Garnaut model if the Productivity Commission can develop a rigorous methodology and finds that it will efficiently and effectively prevent leakage.

"The independent expert Climate Change Authority will also be consulted as to whether industry assistance is impacting on progress towards meeting scheme caps. This will inject environmental rigour into the whole question of industry assistance."