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Carbon price will cut pollution now, lay foundations for science-based climate action

Australia will start to cut carbon pollution immediately and is laying firm foundations for more ambitious, science-based climate action in the years ahead thanks to the Multi-Party Climate Change Committee agreement announced today.

"The Greens promised to deliver a climate action package which was a platform for stronger action rather than a ceiling which held Australia back and we have done just that," Australian Greens Deputy Leader, Senator Christine Milne, said.

"With the establishment of an expert Climate Change Authority, the lifting of the 2050 target to 80%, the five year scheme caps updated each and every year from 2015, and a price floor introduced at the same time, I am confident that this package can deliver real, science-based pollution cuts.

"The groundbreaking support for renewable energy, energy efficiency and landscape carbon, the contracts for closure of coal fired power plants and the limits on the use of international offsets ensure that pollution cuts which were pushed into the distant future under the government's original plans will start now.

"Professor Will Steffen, the expert advisor to the MPCCC, was a highly valued source of advice on the questions of science and Australia's role, and his input was greatly appreciated."

Ensuring that the climate change package is a platform for stronger action:
• The scheme's architecture and starting price - beginning with a fixed price starting at $23 to get Australia moving before agreement can be reached on an emissions target - is the deadlock-breaker proposed by the Greens in January 2010;
• There will be no upper limit on emissions reductions, no legislative constraint on increasing ambition within just a few years;
• Australia's 2050 emissions target will be lifted to 80% - a big increase from 60% - and caps will be set according to a budgets approach rather than targets;
• An independent expert Climate Change Authority will be established to recommend targets and caps for when flexible pricing begins;
• Targets will only be set in 2014 to commence in 2015 for five years, extended each year by one year (eg 2015-2019, 2016-2020, 2017-2021), not bound by 'gateways' for 15 years into the future;
• If the government cannot secure parliamentary support for its targets, a default cap for one year only expressed in megatonnes of CO2 will be put in place, with the process to be repeated the following year; and
• There will be a price floor for 3 years when the scheme moves to flexible pricing ($15 in 2015 increasing at 4% real each year), ensuring price stability.

In recommending targets, the Climate Change Authority will have regard to:
• announced government medium and long-term targets;
• estimates of the global emissions budget;
• progress towards emissions reductions;
• economic, social and other relevant factors; and
• voluntary action, including GreenPower and any approved new methodologies

"The Climate Change Authority, which will be made up of independent experts, has the potential to be a global leader. Its expert advice will have a big impact on political debate and the government will have to justify - both in the parliament and to the public - any discrepancy between scheme caps it proposes and the Authority's recommendations.

"The Authority will make new recommendations each year for Australia's emissions trajectory and its annual reporting date of February 28 will become a critical date in the political calendar.

"The 15 year emissions 'gateways', along with the long-term nature of industry compensation and the unlimited capacity to meet liability with imported permits, were a key reason the CPRS locked in failure.

"With the gateways removed and a process which revisits our emissions budget each and every year, we have the real potential to lift our sights to ambitious, science-based climate action within just a few years.

"The introduction of a floor price to ensure price stability when trading starts is a lesson learned from Europe's experience. It also gives investors great confidence in the price for a full six years.

"One of the best aspects of this package is that, by showing the world that we are getting started with climate action and we aren't limiting ourselves with weak targets, we will give global climate talks a big boost. That in turn helps us aim higher at home when the time comes to set targets.

"We are not yet building a safe climate future. But this package lays the foundations well."


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