Australia's reluctance to ratify the Kyoto Protocol is hurting business

There are clear-cut advantages for Australian companies to be able to trade greenhouse gas reductions to achieve internal Australian Kyoto targets.

Such a scheme would best be based on the Kyoto system so that it is internationally compatible.

Some countries, particularly the Europeans, may attempt to impose trade sanctions on non-ratifying countries. This may be contrary to World Trade Organisation rules, but a stigma could accompany such action particularly due to the susceptibility of European government policy to the demands of environmental advocates.

Under Kyoto, emission trading will start in 2008. This gives ample time for our Government to analyse not just the economic penalties of ratifying but also the penalties on the international activities of Australian business if we don’t ratify.

Australia is now a leader in renewable energy production, solar energy and energy efficiency and has much to offer the world.

Our environmental and renewable energy industries will clearly suffer if excluded from the international scene in terms of trade and investment opportunities.

The US has the economic and political clout to operate outside the international agreement but any hope that they will look after Australian business and not compete vigorously against us in any remaining markets is likely to be forlorn.

To address these issues, the Commonwealth Government must undertake a full economic assessment of the impact of not signing the Kyoto Protocol if we are to have a clear understanding of what this means to Australian business and the broader community.