Australian firms accused of carbon scheme scaremongering

Green groups have urged Australia's competition regulator to launch a probe into some of the country’s biggest corporations, accusing them of releasing " deceptive" claims about the cost of the government's planned emissions trading scheme.

The Australian Conservation Foundation (ACF) and Australian Climate Justice Program have asked the watchdog to investigate whether or not six companies have made "misleading and deceptive" statements about the expected cost of carbon trading to gain government compensation.

In a formal complaint lodged with the Australian Competition and Consumer Commission, the green groups accused mining firms Woodside, Xstrata and Rio Tinto; construction materials supplier Boral; oil refiner Caltex Australia and the country's largest steelmaker, BlueScope Steel, of attempting to undermine the proposed scheme.

The letter asks the watchdog to investigate the companies' claims that the government’s proposed Carbon Pollution Reduction Scheme (CPRS) will lead to job losses, increased operating costs and an uneven playing field against overseas competitors that are not subject to similar laws.

The CPRS had been widely welcomed by green groups and would mandate the introduction of a carbon cap-and-trade scheme from 2011.

However, claims from corporate lobbyists and carbon-intensive businesses that the scheme would damage the economy have already been acted upon. The government announced last month that it was to delay the introduction of the scheme by 12 months and a controversial package, called the Global Recession Buffer, was also recently added to provide financial assistance to high-polluting industries.

Under the new package, companies exposed to overseas trade competition would be entitled to varying amounts of free carbon trading permits during the first five years of the scheme.

The ACF estimates that the buffer package could leave Australia's heaviest-polluting industries with more than $13bn (£6.3bn) in compensation, of which $9.3bn would go to 20 firms.

ACF executive director Don Henry called on the competition regulator to examine whether or not exaggerating the likely economic impact of the scheme was in breach of the country's Trade Practices Act. "Some of Australia's biggest corporate polluters appear to be presenting the worst case to government and the public in an effort to gain excessive free permits, while presenting the best case to investors in order to keep their share prices up," he said.

Australia's ruling Labor government has been spearheading the proposed carbon trading scheme with the goal of achieving a five per cent reduction on year 2000 levels of carbon emissions by 2020.

However, concerns are mounting that the entire package could be defeated by the country’s senate later this month due to a lack of support by the opposition and key independents.

While Australia accounts for only about 1.5 per cent of global emissions, it is the largest per-capita polluter in the developed world due to its heavy use of fossil fuels, primarily coal.