Identifier
Created
Classification
Origin
09CANBERRA1070
2009-12-02 07:06:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Canberra
Cable title:
RUDD'S EMISSIONS TRADING SCHEME DEFEATED IN SENATE
how-toVZCZCXRO4851 OO RUEHPT DE RUEHBY #1070/01 3360706 ZNR UUUUU ZZH O 020706Z DEC 09 FM AMEMBASSY CANBERRA TO RUEHC/SECSTATE WASHDC IMMEDIATE 2380 INFO RUEHBJ/AMEMBASSY BEIJING 9664 RUEHCP/AMEMBASSY COPENHAGEN 1172 RUEHJA/AMEMBASSY JAKARTA 5572 RUEHLO/AMEMBASSY LONDON 2156 RUEHOT/AMEMBASSY OTTAWA 0015 RUEHUL/AMEMBASSY SEOUL 9968 RUEHKO/AMEMBASSY TOKYO 3755 RUEHWL/AMEMBASSY WELLINGTON 0172 RUEHBN/AMCONSUL MELBOURNE 6817 RUEHPT/AMCONSUL PERTH 5082 RUEHDN/AMCONSUL SYDNEY 5086 RHMFISS/DEPT OF ENERGY WASHINGTON DC RUCPDOC/DEPT OF COMMERCE WASHINGTON DC RUEATRS/DEPT OF TREASURY WASHINGTON DC RHMFIUU/HQ EPA OIA WASHINGTON DC RHMFIUU/HQ EPA ADMINISTRATORS WASHINGTON DC RHEHNSC/NSC WASHINGTON DC RHEHAAA/THE WHITE HOUSE WASHINGTON DC
UNCLAS SECTION 01 OF 02 CANBERRA 001070
SENSITIVE
SIPDIS
STATE FOR S/SECC STERN, PERSHING, OES/EGC TALLEY, EEB
MONOSSON, WHITE HOUSE FOR BROWNER
E.O. 12958: N/A
TAGS: SENV KGHG PREL AS
SUBJECT: RUDD'S EMISSIONS TRADING SCHEME DEFEATED IN SENATE
REF: A. CANBERRA 1053
B. CANBERRA 920
C. CANBERRA 893
UNCLAS SECTION 01 OF 02 CANBERRA 001070
SENSITIVE
SIPDIS
STATE FOR S/SECC STERN, PERSHING, OES/EGC TALLEY, EEB
MONOSSON, WHITE HOUSE FOR BROWNER
E.O. 12958: N/A
TAGS: SENV KGHG PREL AS
SUBJECT: RUDD'S EMISSIONS TRADING SCHEME DEFEATED IN SENATE
REF: A. CANBERRA 1053
B. CANBERRA 920
C. CANBERRA 893
1. (SBU) Summary: The Rudd government's Carbon Pollution
Reduction Scheme (CPRS) was defeated in the Senate after the
Opposition changed leadership and subsequently rejected the
scheme. The government will re-introduce the bill on
February 2, but consensus is that the current deal is dead.
In the meantime, Rudd will not benefit from the added
leverage that an approved CPRS legislation would have given
him in international negotiations at Copenhagen. The Greens
could now acquire the role of power broker in future climate
change votes in the Senate. End Summary.
CPRS FALLS SHORT BY 5 VOTES
--------------
2. (SBU) The CPRS identified a reduction target between
5-25% over 2000 levels by 2020 (depending on the outcome of
international negotiations) and did not include specific
targets that were to be announced at Copenhagen.
Nevertheless, the CPRS was defeated following several days of
intense debate (more than 40 hours in the Senate). The
election of new Liberal Leader Tony Abbott (ref A) on
December 1 was the final blow, as he immediately signaled he
would not vote for the bills, characterizing them as "a $120
billion tax on Australians." All the Independent, Green,
National Party and Liberal (save two) senators voted against
the bill.
3. (SBU) Major Australian industry groups generally accept
the CPRS and want an end to the uncertainty over a future low
carbon framework. The government failed to convert that
acceptance public pressure on the Opposition from key
industries ahead of the vote. The government plans to
reintroduce the bills on February 2, but Abbott's outspoken
opposition to climate change and the CPRS in particular will
make it very unlikely that the government can negotiate a
deal in 2010.
FRONT AND CENTER FOR 2010 ELECTIONS
--------------
4. (SBU) General opinion is the turnabout on the CPRS will
weaken the Opposition in future elections, which could come
as early as March if Rudd chooses to use the defeat as a
trigger for a double-dissolution of parliament. The only way
the existing plan could be passed now is through a joint
sitting of parliament following an early election. Few
believe that Rudd, not known as a risk-taker, will take that
route. Climate change should therefore be one of the
predominant campaign issues in the regular elections, which
are scheduled for late 2010.
5. (SBU) The Opposition will need to devise a
counter-proposal to the cap-and-trade scheme in the first
quarter of 2010. The Liberals will be hesitant to embrace
carbon taxes - since they axed the CPRS by portraying it as a
tax - and so will likely rely on alternative approaches, such
as increased funding for clean technology, voluntary
agricultural offset programs and sequestration, and subsidies
Qagricultural offset programs and sequestration, and subsidies
for higher renewable energy investment. Given the Liberals'
overall electoral weakness, the Greens could gain several
Senate seats and become the swing party in the Senate, and
further complicating passage of future legislation.
WILL IT IMPACT COPENHAGEN?
--------------
CANBERRA 00001070 002 OF 002
6. (SBU) Comment: The government's position fell apart due
to a perfect storm of growing unease about the impacts of the
national cap-and-trade system's cost, irreconcilable
differences within a skeptical opposition, and the Rudd
government's inability to convincingly link the CPRS to
Australia's future welfare, at least among enough members of
the Opposition. The defeat means little for Australian
industry and emissions in the short term, as the CPRS was not
due to enter into force until 2011. Rudd will be unable to
use passage of the bills to demonstrate Australia's strong
leadership role on this issue in Copenhagen. Australia's
failure to enact a comprehensive scheme could further stoke
fears that developed countries may not be able to follow
through domestically on commitments made in Denmark.
BLEICH
SENSITIVE
SIPDIS
STATE FOR S/SECC STERN, PERSHING, OES/EGC TALLEY, EEB
MONOSSON, WHITE HOUSE FOR BROWNER
E.O. 12958: N/A
TAGS: SENV KGHG PREL AS
SUBJECT: RUDD'S EMISSIONS TRADING SCHEME DEFEATED IN SENATE
REF: A. CANBERRA 1053
B. CANBERRA 920
C. CANBERRA 893
1. (SBU) Summary: The Rudd government's Carbon Pollution
Reduction Scheme (CPRS) was defeated in the Senate after the
Opposition changed leadership and subsequently rejected the
scheme. The government will re-introduce the bill on
February 2, but consensus is that the current deal is dead.
In the meantime, Rudd will not benefit from the added
leverage that an approved CPRS legislation would have given
him in international negotiations at Copenhagen. The Greens
could now acquire the role of power broker in future climate
change votes in the Senate. End Summary.
CPRS FALLS SHORT BY 5 VOTES
--------------
2. (SBU) The CPRS identified a reduction target between
5-25% over 2000 levels by 2020 (depending on the outcome of
international negotiations) and did not include specific
targets that were to be announced at Copenhagen.
Nevertheless, the CPRS was defeated following several days of
intense debate (more than 40 hours in the Senate). The
election of new Liberal Leader Tony Abbott (ref A) on
December 1 was the final blow, as he immediately signaled he
would not vote for the bills, characterizing them as "a $120
billion tax on Australians." All the Independent, Green,
National Party and Liberal (save two) senators voted against
the bill.
3. (SBU) Major Australian industry groups generally accept
the CPRS and want an end to the uncertainty over a future low
carbon framework. The government failed to convert that
acceptance public pressure on the Opposition from key
industries ahead of the vote. The government plans to
reintroduce the bills on February 2, but Abbott's outspoken
opposition to climate change and the CPRS in particular will
make it very unlikely that the government can negotiate a
deal in 2010.
FRONT AND CENTER FOR 2010 ELECTIONS
--------------
4. (SBU) General opinion is the turnabout on the CPRS will
weaken the Opposition in future elections, which could come
as early as March if Rudd chooses to use the defeat as a
trigger for a double-dissolution of parliament. The only way
the existing plan could be passed now is through a joint
sitting of parliament following an early election. Few
believe that Rudd, not known as a risk-taker, will take that
route. Climate change should therefore be one of the
predominant campaign issues in the regular elections, which
are scheduled for late 2010.
5. (SBU) The Opposition will need to devise a
counter-proposal to the cap-and-trade scheme in the first
quarter of 2010. The Liberals will be hesitant to embrace
carbon taxes - since they axed the CPRS by portraying it as a
tax - and so will likely rely on alternative approaches, such
as increased funding for clean technology, voluntary
agricultural offset programs and sequestration, and subsidies
Qagricultural offset programs and sequestration, and subsidies
for higher renewable energy investment. Given the Liberals'
overall electoral weakness, the Greens could gain several
Senate seats and become the swing party in the Senate, and
further complicating passage of future legislation.
WILL IT IMPACT COPENHAGEN?
--------------
CANBERRA 00001070 002 OF 002
6. (SBU) Comment: The government's position fell apart due
to a perfect storm of growing unease about the impacts of the
national cap-and-trade system's cost, irreconcilable
differences within a skeptical opposition, and the Rudd
government's inability to convincingly link the CPRS to
Australia's future welfare, at least among enough members of
the Opposition. The defeat means little for Australian
industry and emissions in the short term, as the CPRS was not
due to enter into force until 2011. Rudd will be unable to
use passage of the bills to demonstrate Australia's strong
leadership role on this issue in Copenhagen. Australia's
failure to enact a comprehensive scheme could further stoke
fears that developed countries may not be able to follow
through domestically on commitments made in Denmark.
BLEICH