Amid tumbling international carbon markets and calls to weaken the carbon pricing scheme, Inside Story's Fergus Green makes the case for retaining an Australian carbon price floor
IT’s tempting to liken Australia’s climate change debate to an episode of Fawlty Towers: just when you think it can’t get more farcical, it does. Having endured a ridiculous scare campaign about a scheme that is in fact extremely modest, the Australian polity now finds itself embroiled in yet another infuriating debate, this time about whether to scrap the price floor – the legislated minimum price planned for the first three years of the scheme’s floating price phase, starting at $15 per tonne in 2015–16 and rising to $17.05 in 2017–18.
The campaign against the floor, one of the few features that would imbue the scheme with a modicum of integrity, has been led by industry groups emboldened by the extremely low prices for carbon permits in the few significant carbon markets that exist globally. Permits in the EU scheme (which Australia may eventually link to) are trading at around A$10, due largely to the European recession and the oversupply of permits. Carbon credits generated under the UN Clean Development Mechanism, or CDM – the main type of international permit Australian emitters can use for compliance after 1 July 2015 – are currently trading at around A$5 per tonne…
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Independent MP Rob Oakeshott (above) is considering lending his support to those arguing for the carbon price floor to be scrapped. Photo: Neerav Bhatt/ Flickr