Australia mulls charging power companies for pollution

CANBERRA, Australia—Australia will consider making electrical power companies pay for greenhouse gas pollution they create, three years after the government scrapped the national carbon tax, a Cabinet minister said Monday.

The conservative government rejected all polluter-pays options in 2014 when it repealed Australia’s three-year-old carbon tax levied against the nation’s biggest industrial polluters.

But Environment and Energy Minister Josh Frydenberg said that charging power generators fueled by coal and natural gas for their pollution was under consideration as the government looks for ways to achieve its carbon gas reduction targets.

He said while his government rejected the previous centre-left Labor Party government’s policy of charging all major industrial polluters, the electricity industry produced a third of Australia’s greenhouse gases and could face its own charges.

The new scheme could include international trade in carbon credits, he said.

“How we do we meet our emissions reduction targets while at the same time keeping electricity affordable and the lights effectively on? That’s our target,” Frydenberg told Australian Broadcasting Corp.

The government on Monday released details of its climate change policy review which will begin in February. Australia has pledged to reduce its carbon emissions by at least 26 per cent below 2005 levels by 2030.

The government replaced the carbon tax with a 2.55 billion Australian dollar ($1.9 billion) fund paid by taxpayers to give incentives to polluters to reduce their emissions. Only AU$400 million is left, Frydenberg said.

Environmentalist John Connor, chief executive of the Australian Climate Institute, said the fund could not achieve Australia’s reduction target.

Australia is among the world’s worst greenhouse gas polluters on a per capita basis because of its heavy reliance on abundant reserves of cheap coal for electricity generation.