Australia backs off

Current worries about the economy and our major trading partners' lack of progress towards carbon pricing may prevent the agriculture sector being covered by the emissions trading scheme in 2015 as scheduled the Government says.

Speaking at Federated Farmers National Council today, Climate Change Minister Nick Smith noted his Government had already said it will not proceed with the inclusion of agriculture and other sectors until it sees comparable progress from other countries.

The entry of the agricultural sector into the ETS has already been delayed once - from 2013 to 2015 and the Government has also increased measures to shield the sector from the full impact of the scheme once it does enter.

Talking to reporters later, Dr Smith said it was too early to say whether agriculture's entry would be delayed.

Australian Prime Minister Julian Gillard in August abandoned plans for a European-style emissions trading scheme.

Australia now has a climate committee looking at whether to proceed with an ETS, a carbon tax or a hybrid of both.

"I think there's a moving feast in Australia," he said.

"There's a real question mark as to whether the Gillard Government is going to be able to make progress in getting a carbon price into their economy. I'm more pessimistic about the US."

Dr Smith said the state of the economy was another key consideration.

"When the economy is just recovering as it is at the moment, we are hesitant of adding additional costs."

The ETS will be reviewed next year and Dr Smith terms of reference and review panel appointments will be made before the end of this year.

"I expect the review will focus on how the ETS should evolve beyond 2012 in the context of international progress."