CPRS returned to the Senate

Today the government returned the Carbon Pollution Reduction Scheme (CPRS) Bills to the Senate.

Great uncertainty remains as to:

• whether these Bills will be passed now or later
• if passed, the final detail of the CPRS, or
• otherwise, whether a double dissolution election will result.

Regardless, the indications remain that some form of carbon pricing regime is inevitable in Australia.

A summary of the current status is:

• The government needs the Opposition’s support to pass the CPRS.
• The Opposition’s emissions trading spokesman Ian Macfarlane has a mandate to negotiate amendments to the CPRS with the government. The Coalition has announced six key required amendments, in the areas of:
1. Increased trade-exposed industries assistance 
2. Agriculture – exclusion from the CPRS, but the ability to generate offset credits
3. Coal mine emissions – exclusion from the CPRS
4. Different treatment for electricity emissions intended to produce lower  electricity price rises
5. Increased compensation for coal-fired electricity generators, and
6. Energy efficiency and voluntary action initiatives.
   
   However, even if an agreement is reached it must be approved by the Coalition party room, from which there have been public indications that a significant number of members may not support the CPRS.¹
   
• The Minister for Climate Change Penny Wong has stated that there are budgetary constraints against the government accepting all six amendments. However, on 15 November 2009 she indicated that the government has agreed to a permanent legislative exclusion of agriculture and to some mechanism to allow farmers to be ‘part of the solution’.
• The Senate is scheduled to sit until 26 November. The government may push for it to sit longer to pass the CPRS.
• If the CPRS is rejected again by the Senate the government will have a double dissolution election trigger. There is High Court authority that ‘prevarication’ will constitute rejection, potentially in failing to vote on Bills. However, it is not clear when that point will be reached.² 
• The government would like the CPRS passed before the December 2009 United Nations Copenhagen Conference.
• During this time the Senate will also consider the legislation to break up Telstra.

This article was written by John Taberner, Consultant, Sydney, Michael Voros, Senior Associate, Perth, and Jason Johnston, Senior Associate, Sydney.

Endnotes

1. For further information on the Coalition’s proposed amendments see our article ‘Coalition’s proposed changes to CPRS’
2. For further information on the possible double dissolution scenarios see our article ‘The Senate and the CPRS’

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