For months a range of major carbon emitters, and their lobby groups, have complained the carbon permit fixed price period and price floor would mean they would suffer major competitive disadvantage, because they would be forced to pay a higher carbon price than European companies.
So the government announces that they’ll drop the price floor and pretty much tie our own carbon price to that in Europe and guess what happens?
Bet you can’t guess.
According to reports in The Australian today, the umbrella industry lobby group for Australian carbon polluters, The Australian Industry Greenhouse Network, as well as Origin Energy think this is not good at all.
But why you ask, surely this has addressed their concern about being competitively disadvantaged against Europe?
It appears that silly old government can’t get anything right and has misinterpreted them. What they should have done, according to the polluters, was not link our scheme with that in Europe so our carbon prices matched. Rather the government should have just dropped the carbon permit floor price and the fixed price period and left it at that.
This would then allow these companies to continue polluting on a business as usual basis, because they could then import hundreds of millions of extremely cheap CER carbon credits from developing countries such as China (currently trading at $2.70).
The Government certainly wasn’t supposed to do what Europe does (and what has been proposed in US cap and trade legislation) and constrain the use of these credits.