Australia’s government is holding talks with businesses about possible changes in pricing for emission permits in a program started July 1.
“Discussions are continuing and no decisions have been made,” the office of Climate Change Minister Greg Combet said today in an e-mailed statement.
The government may scrap a proposed minimum price of A$15 ($15.80) and restrict access to cheaper international carbon credits, the Australian Financial Review reported today, without citing where it got the information. The government is in negotiations with the Greens, the political party that Gillard relies on to pass laws in the lower house of parliament, over the proposal, the newspaper said.
The carbon price is Prime Minister Julia Gillard’s main tool for reducing the country’s reliance on coal and meeting its target for a 5 percent cut in greenhouse gas emissions from 2000 levels by 2020. The levy was set at A$23 a ton for the year starting July 1 and is slated to rise at a fixed-rate until 2015, when the nation plans to introduce market-based price in a cap-and-trade system that lets companies buy and sell permits. They will also be allowed to use so-called global offsets to meet as much as 50 percent of their required emissions cutbacks.
While Certified Emission Reductions in the United Nations’ Clean Development Mechanism traded this week for less than 3 euros ($3.70), Australia’s carbon law established a minimum price of A$15 in 2015, and the government is working out exactly how about 300 emitters bound by the plan would make up the difference. Australian carbon costs are forecast to be more than double the rate in the European Union, which runs the world’s biggest emissions markets.
European Union carbon permits fell yesterday to 7.15 euros, the lowest level since Aug. 3 on the ICE Futures Europe exchange in London.
Tony Abbott, the Australian opposition leader whose Liberal-National coalition leads polls ahead of elections that must be held by November 2013, has vowed to repeal the so-called carbon tax.