Recent news reports suggest that the carbon pricing scheme, even if it does not get scrapped by the next government, faces a bleak future. The European Union, with which Australia's emissions trading scheme will be linked from July 1 2015, is plagued by a very large oversupply of permits and a depressed carbon price. Does this mean that Australia should consider bringing back the carbon floor price? Or does this mean that Australia should reconsider the carbon pricing scheme as the centrepiece of Australia's climate change policy?
The carbon pricing scheme
The main carbon pricing legislation (The Clean Energy Act 2011 (Cth)), divides the carbon pricing scheme into the following two phases: