Carbon price not right

When the multi-party climate committee of Labor, the Greens and independent MPs agreed on a starting price of $23 per tonne of carbon dioxide (10 July 2011), this price was in-part based on the European price at the time of around $20 per tonne.

Carbon price not right, Australia, ALP, Coalition, the Greens, Independent MPs, Labor

When the multi-party climate committee of Labor, the Greens and independent MPs agreed on a starting price of $23 per tonne of carbon dioxide (10 July 2011), this figure was in-part based on the European price at the time of around $20 per tonne.

Since the decision, the European price of carbon dioxide has fallen to under $10 per tonne. While it may seem obvious that the Australian price will also fall, analysts and economists interviewed by The Age cautioned against this assumption and said that before any comparisons were made, we need to consider what the scheme is designed to achieve.

A recent analysis by Bloomberg New Energy Finance forecast that the Australian price would fall to $15 in 2015 and $4 in 2020 once the floor price is removed. David Pearce, Executive Director of the Centre for International Economics in Canberra also expects this price to fall to $15 in 2015.

Should the Australian carbon price be reviewed before implementation?

Read Drew's blog - The big gamble
Read more from TheAge.com.au





    COMMENTS

    To make a comment, please register or login
    ozimarco
    17th May 2012
    12:58pm
    I think that, if the initial price is too low, there will be little incentive for the big polluters to change the way they are doing things. They would just absorb it is as a cost of doing business. A higher price is more of an incentive to start making positive changes in a shorter time frame.

    17th May 2012
    4:35pm
    This is the greatest political con that I have ever come across. The Government has finally found out how to overcome the greatest taxation problem of all time:- How to tax the air we breathe. The Companies effected all have a couple of things in common. They can all pass on the cost to the end user, or they don't have to because of a special dispensation. Why would there be an incentive to making positive changes if you have the choice of don't make the change & pass on the cost OR make the changes & go bankrupt. We are continually being told that it will not cost the public anything because we will be overcompensated. Are we really as thick as they seem to think? We are told that we are going to tax $23P/Tonne & give the taxpayer back more than is collected. On top of that we are going to be hit with over 1,000 new public servants to administer the rort, give a couple of billion dollars the the principle of one world government & get rid of the deficit. WOW 1 plus 1 now equals 11 not 2. In short, the higher the price, the quicker the industry goes belly up & we replace the local industry with the imports, that are already way cheaper, & that we are subsidising because they don't have the tax. Talk about between treated like mushrooms.
    Brad
    17th May 2012
    5:45pm
    It never ceases to amaze me how arrogant humans are,we live on a very thin shell of a highly explosive ball of gases which could self destruct any time it chose. Our climate/universe is completely controlled by our sun and moon and we have scientists/experts etc.. trying to con us into believing that we really play some part in this. Well if you accept so much bull then you deserve a carbon tax.
    UNCLE FESTER
    18th May 2012
    4:57pm
    Where is the incentive to reduce the use of energy by the end user? The government are chucking the money around without any requirement for any savings to be made - basically giving the money to people so they can continue inefficiently using energy - and, of course, so they can love the government!
    There should be more incentives provided to the end user to reduce their energy output and schemes like REES and VEET expanded so that the energy savings made provide an ongoing support to that household by way of rebates. Households that do not reduce energy will pay the higher costs until they get the message.
    pate
    19th May 2012
    9:43am
    Sounds like Innes is a tax payer? who earns too much to receive the benefit of any Government handouts sounds like sour grapes to me. Our lousy Sate Govt gives us nothing for providing them with electricity that our solar system amkes, the big advantage to us is any electricity we use while the sun is shining costs us nothing but they do not heat our water of a day time so we pay for Hot Water for our showers even tough the are had in daylight hours. I suggest onstead of whinging that Innes does something constructive about saving electricity & maybe putting some back intt the grid to save the use of filthy coal..
    Pass the Ductape
    19th May 2012
    10:37am
    I haven't heard one comment about the way this carbon tax is going to affect the GST. Surely the amount of increased GST collected will be enormous, because you can guarantee the GST will be applied after the carbon price has been added - or have I missed something somewhere?
    slapsy
    19th May 2012
    1:43pm
    I don't think any of you people have ever worked in a heavy industry, like the Port Kembla Steelworks,for example.When there was something in it for them they could reduce the emmissions easily.When they got nothing out of it they did nothing.They have shown it can be done,what better incentive than if it is going to cost you money if you do nothing.This is their language.


    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles