Australia: ETS threatens gas industry and worse climate change

Australia’s $15 billion gas industry could shrink by more than a quarter by 2020 unless it is protected from the economic effects of the proposed emissions trading scheme.

The industry will use new analysis to reinforce its concerns to the Rudd Government that excluding LNG from compensation under the proposed ETS will stall up to $60billion of new investment, and will actually worsen climate change by forcing developing economies, including China, to build more coal-fired power stations.
The new modelling, by Frontier Economics, estimates the 10 per cent cut in greenhouse emissions by 2020 proposed by the Government’s chief climate change adviser, Ross Garnaut, will require a $54 a tonne price for carbon and will slow the economy by nearly 2 per cent over the next 12 years.

Victoria’s brown coal industry will be forced to halve its output, while the nation’s natural gas and LNG projects would be cut by about 25 per cent because they are not eligible for compensation under the scheme outlined in the Rudd Government’s green paper in July.

The Australian