Australia Needs Carbon Price Over A$40, Greens Senator Says

Australia needs a price of more than A$40 ($42) per ton on carbon emissions, Greens Senator Christine Milne said, setting up a potential conflict with the ruling party as lawmakers negotiate details of a trading plan.

The fee proposed by the Greens party is higher than that suggested by Climate Change Minister Greg Combet, who told ABC radio today the starting price would be “well south” of A$40. Milne, a member of the government’s Multiparty Climate Change Committee that is meeting in Canberra today, said the group had not yet agreed on a starting price.

“I certainly recognize that you are going to need a price at A$40 or more to shift from coal to gas and then a higher price still for gas to renewables,” Milne told Australian Broadcasting Corp. radio. The lawmakers involved need to agree on “a combination” of measures, she added.

The committee is working to agree on details of the plan before July 2012 to allow full trading to begin as early as 2015. Ruling Labor Party Prime Minister Julia Gillard wants to reduce greenhouse gas emissions by at least 5 percent by 2020 and has set a target of generating 20 percent of the country’s energy from renewable sources like wind and solar.

Today’s meeting comes after a Newspoll opinion survey on May 4 said some 60 percent of voters opposed the government’s plan to implement carbon trading. Companies including BlueScope Steel Ltd. (BSL), Rio Tinto Group and Woodside Petroleum Ltd. (WPL) have called for changes to the plan and warned of job losses.

Opposition Liberal-National leader Tony Abbott has vowed to fight the law, saying it will increase electricity prices in an economy where families are already struggling with high living costs.

The government has said more than 50 percent of revenue from the carbon plan would be used to aid households cope with rising costs associated the transition to cleaner energy, with the rest to assist companies and fund clean energy projects.

To contact the reporter on this story: Gemma Daley in Canberra at gdaley@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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