Kevin Rudd has failed his own test on climate change

Arguments can be made about whether emissions trading or a carbon tax is the best mechanism, however what is crucial is having a strong price signal.

The evidence points to sooner, rather later, being the best time to get a price on carbon started. Treasury’s massive modelling exercise in 2008 concluded “delaying action increases the risks and costs on achieving any given environmental goal”.

The Australian Business Roundtable on Climate Change, which included BP, Origin and Westpac, found “the longer we delay acting, the more expensive it becomes for business and for the wider Australian economy”.

Kevin Rudd has diminished business certainty with his hastily made announcement to delay the ETS.

Investments in clean energy will be shelved. Even investments in polluting industries will face the uncertainty of a radically different and hopefully stronger carbon price being enacted over the next few years.

Oil and gas producer Santos has confirmed it will not proceed with a proposed $800 million gas-fired power plant in Victoria while there is uncertainty about a carbon price. The Australian newspaper has called it an “investment strike” in power generation.

Of course while our economy and environment would be better off if we got started now with a serious price on carbon, some industries see a delay to the ETS as a big win.

The corks will be popping in the top floor offices of high carbon polluting businesses that have done little to diversify because, for them, delay is victory.

Last May’s announcement of a one-year delay to the start of the CPRS and a fixed price of $10 a tonne meant the six most polluting industries avoided paying $1.1 billion for the pollution they pump into the atmosphere, according to analysis by RiskMetrics for the Australian Conservation Foundation.

This further two year delay will mean companies like Rio Tinto and BHP Billiton will avoid paying millions for their pollution, which damages the atmosphere for all of us.

Meanwhile our economy suffers the costs and increased risks of delay.

Delaying serious action on climate change is a weak, in fact cowardly, decision that is not founded on any evidence and will increase business un-certainty.