Howard Government set to defer implementation of carbon emissions scheme to 2012; critics say weak scheme dangerous, carbon price must be over $20/tonne
Posted by gmarkets on 2 October, 2007
The Prime Minister’s report conveyed that the Government would take four or more years to implement a carbon emissions scheme, reported the The Australian Financial Review (1/6/2007, p. 20).
Rivalling Labor policy: The findings supported the Prime Minister’s arguments against Labor’s call for a 60 per cent cut in emissions by 2050. The report suggested that any premature introduction would undermine the stability of the scheme, negating Labor’s policy of a 2010 start date. The report also concluded that a cap-and-trade system was the least-cost approach to curbing emissions because companies could emit carbon up to a set limit, paying added costs only if they exceeded the cap.
Critics condemn PM’s proposal: The Prime Minister’s proposed delay of carbon trading attracted criticism from some in the business community, who warned that a low initial price on carbon could “exacerbate risks” and hinder investment in low-emission technology. “Our fear is that a weak scheme could perpetuate investment uncertainty,” Citigroup research analyst Elaine Prior said. The Citigroup research also found that a carbon price below $20 a tonne would not drive investment in clean coal, gas and renewables. Rather, it would “further paralyse” investment in the electricity sector and force up power prices.
The Australian Financial Review, 1/6/2007, p. 20