WASHINGTON: The Government and the Opposition have both rushed to stress that the G20's agreement to end billions of dollars' worth of global subsidies on fossil fuels will have no effect on Australia.
The Treasurer, Wayne Swan, said yesterday he did not believe the phasing out of subsidies was an issue for Australia.
''We are putting a price on carbon via the Carbon Pollution Reduction Scheme and we are, of course, putting in place transitional assistance for both households and industry over time.
''But I don't believe it has implications for us,'' Mr Swan told theMeet The Press program.
''It is aimed particularly at some massive subsidies elsewhere in the world which do need to be removed over time.''
In Australia it has been argued that big state government contributions to the cost of mining companies getting their coal to ports amount to a significant subsidy.
But the biggest subsidy comes in the form of the concessional fringe benefits tax treatment of company-provided cars.
The Opposition's spokesman on emissions trading, Ian Macfarlane, said Australia would not be affected by the recommendation for an end to subsidies.
''We do not subsidise fossil fuels'' as some countries did, he said. T he G20 move showed how far ahead Australia already was.
''For Australia really our focus is on how we lower the emissions from fossil fuels, particularly in relation to coal, how we progress with our emission coal technology but also in terms of energy efficiency and using more efficient motor cars.''
On Friday, G20 leaders committed to phasing out fossil fuel subsidies over the medium term and asked finance ministers to report back at the next meeting in Canada next June.
The OECD and the International Energy Association have estimated that if fossil fuel subsidies were eliminated by 2020, greenhouse gas emissions would be reduced by 10 per cent by 2050 - the year in which the world has pledged to cut emissions by between 50 and 80 per cent.
The main target of the changes are some developing nations that directly subsidise the cost of petrol as part of their social welfare and economic development policies.
The cost of fuel in Mexico, Indonesia and India is kept at artificially low levels because of government programs driving its use. But developed nations also have several indirect subsidies which drive the use of fossil fuels.
According to Chris Reidy, a researcher at the Institute for Sustainable Development, who did his PhD on subsidies to fossil fuel industries, Australia is not a huge offender. Nonetheless, it forgoes about $9 billion a year in tax revenues and the biggest concession is through the treatment of company cars, at a cost of $1.1 billion in 2007 dollars.
Mr Macfarlane said the Coalition's first challenge was to see if it could delay the vote on the Government's emissions trading legislation until after the Copenhagen climate change meeting.
''It's simply crazy to rush ahead of countries like the US, Canada, the EU, in fact, all the G20 countries'', which would not have legislation in place by Copenhagen, he told the Nine Network.
''So our challenge is to firstly see if we can talk Kevin Rudd into common sense and then secondly, if we can't do that, to put forward practical amendments that will protect jobs and industries in Australia.''
with Brendan Nicholson