Reward for Early Action

To give industry certainty about future investment, the Government will ensure that the emission baselines for industry assistance will not be increased – they will be as determined under the Carbon Pollution Reduction Scheme (CPRS).

How does this measure encourage early action?
Allocations of permits to companies for emissions-intensive activities are based on historic estimates of emissions intensity and will continue to be provided on this basis.

Improvements in emissions intensity undertaken by individual businesses from these historical baselines will not reduce the permit allocations these businesses will receive under a future market to limit pollution.

Retaining these baselines will ensure any efforts undertaken by a business now to cut pollution will be rewarded, because it will mean they will be required to purchase fewer permits in a future market to limit pollution.

It will encourage action early rather than causing businesses to delay action until a market mechanism is introduced.

It will make businesses think twice before adding to their pollution levels ahead of a future market – because if they pollute more, they may have to make even greater emissions reductions down the track.