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The 2010 start date for Australia's proposed Carbon Pollution Reduction Scheme (CPRS) is in doubt after draft legislation released last month drew fire from both environmental and industry groups alike. The CPRS is the mechanism by which the federal government hopes to fulfil its current unconditional commitment to reduce carbon emissions to 5% below 2000 levels by 2020 and a provisional agreement to cut emissions by 15% by 2020.

Environmentalists are particularly angered by a provision that any big Australian polluter can buy unlimited "offset" pollution credits from developing countries. The draft would see companies getting up to 90% of their carbon emission permits for free if they are exporters whose international competitors have no emissions restraints. The remaining 10% could be bought from countries such as China under the UN's Clean Development Mechanism.

The support of Australia's Green Party is seen as vital for the ruling Labor government to get its legislation approved. The Greens, though, have united with the opposition Liberal Party against the proposal as it stands. Christine Milne, a senator in the Green Party, says if Labor wants its support, there must be stringent caps on how many carbon offsets can be bought from developing countries. A Senate inquiry into the proposals is now planned, which many fear will delay the start date, stifling the flow of capital. The longer the delays, "the lower the probability the success of the scheme," warns Amanda McCluskey from Colonial First State Bank, speaking to the Sydney Morning Herald.

Energy intensive industry groups say plans for a carbon emissions trading system, slated to start operating in July 2010 under the CRPS, will increase their cost burdens and mean significant job losses. The federal government's climate change expert, Professor Ross Garnaut, refutes this. "The recessionary impact of the great crash is likely to be over by the time a mid-2010 emissions trading scheme is introduced," he said on ABC Radio. "The period of recovery from recession is a very good time for investment in structural change."

Garnaut says a case exists for a fixed carbon price when the trading system begins operating, which would enable businesses to get accustomed to the new arrangements. He defends the proposal to allow companies to buy offset pollution credits from developing countries. The overall objective is to reduce global emissions, he says. "If it suits Indonesia to do more and Australia to do less, then there is nothing environmentally wrong."