Reported in the Australian today:
New research predicts Australia's carbon price could collapse to about $4 a tonne by 2020 and that the scheme, as designed, risks failing to support either renewable energy power development or the switch from coal to gas needed to slash the nation's emissions.
A draft report prepared by Bloomberg New Energy Finance for the Australian Industry Greenhouse Network, which represents some of Australia's biggest companies in the climate change policy debate, says the scheme's strong linkages to the international carbon market, where prices are expected to remain low, will mean average carbon prices could fall sharply after the domestic floor price is removed in 2018.
Under the design of the scheme, a price floor of $15 (rising at 4 per cent a year) will be imposed for three years when the $23 fixed price period, which starts on July 1, makes way for a floating cap and trade scheme from July 2015.
The report shows continued low international prices pose a potential political threat to the government, as business groups that oppose the scheme outright or have called for the starting price to be as low as $10 a tonne warn that Australia's $23 price from July 1 is more than twice that of Europe.
Well done Oz journos. I exposed this on FEB 15 2010: Why Cap & Trade Could Cause the Next GFC
Better late than never I suppose.
