FACTBOX: Australia's planned carbon trading scheme
(Reuters) - Australia's government outlined changes to its planned carbon trading scheme on Tuesday, designed to win political support to help the laws pass through parliament's upper house Senate.
The changes represent a deal offered by the government to opposition lawmakers, who are deeply divided on climate policy.
Here are some facts about how the center-left government's scheme will look, if passed by parliament.
* The Carbon Pollution Reduction Scheme is set to start on 1 July, 2011. Under the scheme, about 1,000 of Australia's biggest polluting companies and operations will have to purchase carbon permits, covering 75 percent of national emissions.
* The government is committed to an unconditional emissions cut of 5 percent by 2020. This target could be increased to 25 percent if the world agrees to a tough new climate pact to expand or replace the U.N.'s Kyoto Protocol.
* The "cap-and-trade" scheme requires polluters to buy a permit for every ton of carbon produced. The government proposes a flat carbon price cap of A$10-a-tonne on start-up. Full auctioning and trading of permits from 2012.
* The government estimates a carbon price of A$26 a ton in 2012-13 due to the strong Australian dollar.
* The scheme includes compensation for businesses and households, with money raised from permits helping taxpayers cope with increased costs for fuel and electricity. The government has promised to cut fuel excise to match increases under emissions trading, while welfare payments would be increased as well.
* Additional expenditure measures will initially cost A$1.28 billion and $7.01 billion over the period 2019-20. A lower estimated carbon price has meant a reduction in assistance to households totaling A$5.76 billion to 2019-20.
ASSISTANCE TO KEY SECTORS
* Some polluters exposed to overseas export competition will receive assistance in 2011-12 at 94.5 percent for high emission intensive activities, 66 percent for moderate emission intensive activities and decline at 1.3 percent per annum.
* Coal Sector: A total of A$1.5 billion in transitional assistance over five years, up from A$750 million previously.
* Voluntary Action: The government will ensure the CPRS takes into account voluntary action by households to cut emissions.
* Electricity sector: An increase of A$4 billion in assistance, increasing the total value of permits to A$7.3 billion.
* Electricity Prices: A$1.1 billion will be allocated to assist medium and large manufacturing and mining businesses with CPRS-related rises in electricity prices in the early years.
* Agriculture: Farmers will be exempt from the scheme, but will be able to take part in the market for carbon offset.
* Food processing: A five-year, A$150 million assistance package will be established within a Climate Change Action Fund.
* Cost of Living: Living costs rise by around 0.9 percent, although power bills are expected to rise by 16 percent. Gas and other household energy bills will rise by 9 percent.
* Households: Around 90 percent of low-income households will receive assistance equivalent to 120 percent or more of their cost of living increase under the scheme.
($1=1.081 Australian Dollar)
(Reporting by James Grubel and David Fogarty; Editing by Jonathan Standing)
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