|Image: Larry Pickering|
Mr Combet said Australia was ditching its earlier plans to impose a floor price on carbon emissions when the current fixed-price carbon tax moves to a floating market mechanism in July 2015.Mr Combet said that the European average carbon price was "around $23 per tonne." Why does that figure seem so familiar?
Instead, he said the Australian market would be linked to that which operates in Europe, where more than 500 million people are covered by carbon trading schemes, meaning the two blocs' carbon price would be "effectively the same".
Things might be on the up and up for the price of carbon credits. As the Business Standard reports
The price of carbon credits is likely to double this year, due to a recovery in demand from the European Union.
A recent report by Barclays Capital, the global consultancy firm, forecast the Certified Emission Reduction (CER) price to surge 92 per cent in the first half of this year. Indian analysts estimate it would almost double before the end of 2012. Currently, a CER unit for near-month delivery on the European Energy Exchange is quoted at 3.55 euros.
A doubling would mean that the unit price would go from €3.55 to ~ €7.10: or in $Afrom $4.28 to $8.56 - a long way from that final carbon dioxide tax price of $24-27/tonne.
The original plan: (link)
The carbon pricing mechanism will commence on 1 July 2012, with a price that will be fixed for the first three years like a tax. The price will start at $23 per tonne and will rise at 2.5 per cent per annum in real terms.
On 1 July 2015, the carbon price will transition to a fully flexible price under an emissions trading scheme, with the price determined by the market.
See also Andrew Bolt's: