Australia has pledged to move forward with a comprehensive carbon trading scheme in 2010, despite concerns that it may not be sufficient to address global warming. The plan includes targets to reduce emissions by 5 percent of 2000 levels by 2020, with a potential increase to 15 percent if an ambitious international agreement is reached. Climate Change Minister Penny Wong emphasized the importance of the scheme for Australia, which has high levels of greenhouse gas emissions due to its reliance on coal. The policy aims to mitigate the economic impact of the scheme during the global financial crisis. If action is not taken promptly, we will face severe and rapid consequences, resulting in the loss of significant industries and jobs in Australia. The current plan involves allowing market forces to determine prices through auctions in the first half of 2010, instead of implementing a fixed price as previously considered. The government anticipates a price of approximately A$25 ($16.70) per tonne, which is lower than the European emission allowances currently trading at around 15 euros (A$30) per tonne. Additionally, the government plans to set an interim price cap of A$40 per tonne, a measure that analysts believe could initially restrict the market's growth. Brett Janissen, executive manager of the consultancy Asia-Pacific Emissions Trading Forum, expressed concerns about the carbon trading scheme, comparing it to a risky strategy of trying to have it both ways. The scheme allows polluters to import carbon permits from overseas green projects while preventing exports from Australia, potentially leading to participants choosing the cheapest option. Despite calls from scientists and green groups for more ambitious cuts, the government is implementing the scheme at a politically sensitive time, just before upcoming elections. Greenpeace climate campaigner John Hepburn criticized the scheme as a "total and utter failure." The government estimates that the scheme will slightly reduce annual growth in gross national product from 2010 to 2050, with a one-time increase in inflation of around 1.1 percent. Wong stated that carbon trading would account for 75 percent of Australia's carbon emissions, involving 1,000 of the nation's largest companies. However, major polluting exporters would receive up to 90 percent of carbon permits at no cost. The rapidly expanding liquefied natural gas (LNG) industry, previously excluded from an initial draft plan in July, was satisfied to receive exemptions in the final version. Belinda Robinson, CEO of the Australian Petroleum Production and Exploration Association, acknowledged the progress made since the model was first outlined in the Green paper. She emphasized the importance of the LNG industry in helping Australia and the world reduce greenhouse gas emissions. Despite these advancements, the targets set were considered cautious compared to global standards. Europe has committed to a 20 percent reduction in emissions by 2020, while the IPCC has recommended that wealthy nations aim for reductions of 25 to 40 percent by then. Martijn Wilder, a partner at Baker & McKenzie in Sydney, expressed disappointment in the proposed scheme, believing it falls short of the IPCC's recommended reduction levels. He noted that while the A$40 price cap would provide companies with certainty regarding compliance costs, it also allows them to buy their way out of compliance if the carbon price exceeds $40. Janissen characterized the scheme as a gentle start with stricter emission reduction targets beyond the 2012-2013 financial year. He also observed that the scheme seems to be providing significant support to industries that are concerned about their emissions intensity, particularly through subsidies for emissions-intensive and trade-exposed industries. Participating companies in the scheme will be required to give up a permit for each ton of carbon they release. It is anticipated that the sale of permits will generate A$11.5 billion in 2010/11, all of which will be used to offset the increased expenses for electricity and transportation for businesses and households. Australian farmers, who have endured a lengthy period of drought, will be exempt from participating in carbon trading for a minimum of five years. Although agriculture is responsible for approximately 16 percent of Australia's emissions, transport and fuel will still be subject to the scheme. The government plans to bring carbon-trading legislation to parliament in 2009. It will require the backing of the Greens and two independent senators, or it could face opposition from the conservative party, who want to postpone the scheme because of the worldwide economic crisis.