Government needs face saver more than CPRS

Canberra is planning to introduce new carbon taxes -- the "Carbon Pollution Reduction Scheme" -- next year.

This would double and eventually quadruple Australia's electricity costs and is the upshot of hundreds of meetings, rousing speeches, and government reports.

A Senate inquiry reviewing the proposal attracted 506 submissions, including the usual gaggle of identical letters from green activists.

These mindlessly prattle on about how we would all benefit from using less energy and applaud solar power, unconcerned about its unreliability and horrendous costs.

There are only a few dozen submissions from Australian businesses and business representative groups.

Some businesses and industry associations support the proposed CPRS.  Solar energy businesses, for example, welcome the favourable taxation and subsidies it offers.

Similarly, firms operating coaches and trains are looking for the CPRS tax to cripple their competitor -- the family car -- with additional fuel excises.

Financial institutions also strongly support the CPRS tax and trade scheme.  The banks, headed by Westpac, are dazzled by the prospect of skimming commissions from trading greenhouse securities in a new government-created market.

Many other industry representative bodies are remaining silent, not wishing to get offside of government.

But Australia's major organisation representing big firms -- the Business Council of Australia -- having long pressed for strong and early emission reduction action, has reversed gear.

The BCA, fearful of saddling excessive costs on industry, has joined other peak bodies like the Australian Retailers Association and the Food and Grocery Council in saying Australia must not introduce penal new carbon taxes unless our competitors take similar action.

It draws attention to the likelihood that a greenhouse tax on Australian factories will drive them overseas.

And it addresses the massive additional costs it would impose on the electricity industry, threatening its viability.

These concerns are shared by individual firms.

The energy-intensive aluminium industry has long warned about the effects of new charges on profitable production in Australia.

Now, Caltex, Bluescope, Rio Tinto, Ford and others are also voicing great concern.  All these firms operate in global competitive situations that prevent Australian regulatory costs being passed on.

Having carefully estimated the costs Australia's scheme would entail, they see dim futures for their own businesses.

Some concerns are also evident in firms that are strong advocates of emission reductions.

For example, BP, which brandishes its green credentials with all the enthusiasm of Paris Hilton flashing her rude bits, wants to see its petrol refining and LNG business interests sheltered from any new carbon tax.

Like other solar energy suppliers, BP is also seeking additional subsidies for renewable energy.

The Senate's deliberations on the CPRS are coming to a head at the same time as increased doubts are emerging about the likelihood of global warming -- the world having cooled over the past 10 years.

Moreover, it seems certain that there will be no international agreement on emission reductions.

Many MPs across the political spectrum see no benefits in Australia taking the lead in introducing a costly new scheme.

The search is therefore on for a face saver.

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