Green Markets

EWN Publishing

Carbon price falls to $6 a tonne: consumers suffer as discounts become uneconomic

Posted by gmarkets on 12 October, 2007

Doubts were raised about how a state scheme would merge with any national emissions trading scheme when the Prime Minister, John Howard, released his emissions trading report in May, according to The Sydney Morning Herald (11/9/2007, p.2).
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Energy-saving devices no longer economical: The New South Wales carbon price, already languishing around $11 a tonne, had fallen further in July, when Howard appeared to exclude demand management and energy efficiency abatement from the scheme. At $6, it was no longer econ­omical for companies such as Easy Being Green, Neco and Fieldforce to install light bulbs, low-flow showerheads and other energy-saving devices into homes free or at heavily discounted prices. Paul Gilding, CEO of Easy Being Green, said the scheme’s most cost-effective and efficient way of cutting greenhouse gas pollution would disappear. “That will be a tragedy,” he said. “This is the scheme that is cutting greenhouse gas pollution at the mass consumer level.”

Certificates too easy to obtain: The NSW Government had been accused by some market partici­pants and green groups of con­tributing to the collapse by making it too easy to generate cer­tificates that did not represent genuine greenhouse gas cuts. The NSW Minister for Climate Change, Environment and Water, Phil Koperberg, had declined a request for an interview. A spokesperson for him blamed the Federal Government for the market crash. The State Government had formed a taskforce to investigate the price collapse.

Energy efficiency companies struggling: The head of the NSW advisory panel on climate change, Martijn Wilder, from the law firm Baker & McKenzie, had said he believed a number of energy efficiency companies in the market were “on the edge”. He said there were two simple factors: the oversup­ply of certificates and the uncer­tainty in the market since the Federal Government announced its carbon trading scheme. Fieldforce’s managing direc­tor, Craig Bathie, said if the price of carbon remained at $6, more than half of NSW householders would miss out on free or dis­counted energy installations, and his company might have to lay off a couple of hundred em­ployees in rural areas. Neco’s carbon services direc­tor, Ben O’Callaghan, had said his company might have to close its regional Carbon Services Div­ision, and 60 jobs in 10 regional locations would be lost.

The Sydney Morning Herald, 11/9/2007, p. 2

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