The options proposed in the Victorian Government's Greenhouse Challenge for Energy position paper need to be treated with extreme caution, says VECCI.

"While the Government has ruled out a carbon tax, if an emissions trading regime has the effect of increasing energy prices or requiring businesses to purchase credits, it may well have the same effect on industry output, exports and jobs", says VECCI Chief Executive Officer, Mr Neil Coulson.

"The accompanying Government-commissioned research indicating minimal job losses under an emission trading regime is based on conservative assumptions of $5 per tonne of CO2 equivalent.

"However, according to the previous Government-commissioned research on the same topic from the year 2000, emissions trading will cost around 50,000 jobs in Victoria alone.

"Developing countries such as China and India are not bound to reduce emissions under the Kyoto Protocol - if this situation remains, emissions trading being implemented in Australia will simply drive manufacturing offshore to those developing countries with less stringent environmental standards.

"In terms of either the proposed expanded Federal Mandatory Renewable EnergyTarget (MRET) or consideration of a separate State-based MRET- renewable energy is useful as a supplementary energy source, but will not power our heavy industry - now or in the foreseeable future.

"Victoria's supply of competitively-priced brown coal has been a major factor in keeping Victoria's energy costs relatively competitive. Brown coal is a vital part of Victoria's competitive edge in manufacturing.

"We are cautious about these proposals and will be examining them in detail", says Mr Coulson.

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VECCI Strategic Communications
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