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by Malcolm Farr

21 Jun 06:00am

The final battle against the carbon pricing scheme before its July 1 introduction will be amid the lumpy terrain and unpleasant pong of suburban garbage dumps. Local government will be fighting to the end the application of the $23-a-tonne penalty for carbon emissions which will be attracted by this usually unattractive community facility.

The circling ibis portend a tipping point in the carbon tax debate… sorry, that was pretty bad.

The circling ibis portend a tipping point in the carbon tax debate… sorry, that was pretty bad.

Meanwhile, the Government will be insisting the same territory, the local landfill site, will become a boon for municipal councils as it will lead to money making prospects for them.

Rubbish tips are an ideal political battleground because while most suburban types don’t own an aluminium refinery or a coal mine, they do cart their clippings and other waste to the tip regularly.

And while the landfill sites of just 33 rubbish dumps out of 565 councils nationally will be caught up in the carbon pricing scheme, they are a frontline community resource.

Miners are allowing cries of dread about carbon pricing, but just yesterday giant Rio Tinto announced a big expansion in iron ore projects, and steel town Whyalla, one of the places said to be wiped from the economic map by the carbon scheme, is lobbying for an expansion of its airport.

While the question of electricity prices is not as clear-cut as the Opposition might insist, the matter of charges at the tip is as obvious as cash-short councils can and will make them, on rates notices or billboards at the dump.

While the scheme will affect only landfill sites which emit more than 25,00 tonnes of methane a year – the big ones – it indicates the reach and intrusion of the carbon scheme into basic community assets.

The Gold Coast Mayor Tom Tate late last month said his council would not pay the carbon price when the bill arrives in July next year.

While this might cost his council more in legal fees to fight the Commonwealth in court than any savings from refusing to pay the carbon invoice, Ald Tate has become a local government hero.

The economics of rubbish dumps are not as simple as the old equation of garbage-in, gas-out might indicate.

Yesterday the Australian Landfill Owners’ Association wrote to parliamentary secretary for climate change Mark Dreyfus to lay out some of its research on how the scheme could warp competition.

It reported that in the Adelaide area there are two large sites clearly over the 25,000 tonne threshold, three smaller sites that are just below the threshold, and a further two small country sites.

“Under the current arrangements the two larger sites cannot pass through their CPM carbon costs without risking a significant loss of business to the smaller sites,” said the ALOA letter.

A second example was Hobart, where there is a relatively new regional landfill site and two smaller council-owned tips.

“Notwithstanding its intention to install a gas collection system shortly the regional landfill expects to have emissions above the threshold whilst the two smaller sites are below the threshold,” said the letter.

“This situation is preventing the larger regional site from passing carbon pass-through costs to its clients.”

And same for a third example in regional Victoria, where between Bendigo and Echuca landfill services are provided by a privately owned regional landfill and a number of smaller country landfills.

“The regional site estimates it will exceed the threshold in 2018 and as a consequence needs to initiate a partial carbon cost recovery from 1 July 2012. The operation of the smaller neighbouring sites is frustrating the regional sites ability to recover its carbon liability costs,” said the ALOA.

“These three examples demonstrate the need for the prescribed distance rule to be re-instated in the legislation and as a result ALOA calls on the Government to bring forward the review of the prescribed distance so that unfair competition between covered and uncovered sites can be avoided.”

But it’s the council sites where the issue will be felt most.

Mark Dreyfus is attempting to convince councillors they have a lucrative opportunity under the scheme to make some money by harnessing the methane and selling the carbon credits on the open market.

They could capture the gas and turn it into electricity to earn Renewable Energy Certificates which also have financial rewards attached.

“Good examples of councils taking a lead in these areas are Tweed Heads which has reduced its gas pollution so significantly, it will not have to pay any carbon price, and Newcastle City Council which generates enough electricity from its captured gas to power 3000 homes,” said Mr Dreyfus in a statement.

Ultimately the Government returns to its household assistance payments which it says will compensate for increased tip charges.

“Rate rises associated with landfill, if any, are estimated to be between 13 cents and 40 cents per household, which is covered by the federal governments average household assistance of $10.10 per household per week, delivered through pension increases, family payments and tax cuts,” said Mr Dreyfus.

Councillors are not dills. They see the opportunity. But they need time to invest in the the capital works to take advantage of those opportunities for decades to come.

Until they get that they will turn their rubbish dumps into carbon pricing martyrs

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