THE government is negotiating with the Greens on changes to the floor price in its carbon tax scheme amid calls for it to be dropped and suggestions Labor is considering moving to an emissions trading scheme earlier than the scheduled start date of 2015.
Just four days after the carbon tax was introduced, The Australian has confirmed talks between Climate Change Minister Greg Combet and the Greens on the final shape of the floor price.
According to sources, Mr Combet last week put to the Greens that the $15 floor price, which will underpin the scheme for its first three years before it becomes a floating ETS in 2015, be dropped. The Australian has also been told that Mr Combet raised moving to a cap-and-trade system earlier…
The Gillard government hopes to link the Australian emissions trading scheme to the EU market, where carbon is currently trading at about $9.80 a tonne compared to the fixed starting price in Australia of $23 and the floor price from 2015 of $15.
Anything that minimises the damage done by this tax should be welcomed. But let us also note:
- this is an implicit acknowledgement that the tax is indeed damaging.
- this is an implicit acknowledgement that the Governmnent is indeed ahead of the rest of the world.
- this makes a nonsense of the claim that the Government’s carbon tax gives business “certainty”.
- this makes it even less likely that the initial $23 a tonne carbon tax will drive the ecoonomy to using green power instead, given business may need wait just two or three years now (even assuming Labor’s reelection) for the price on carbon dioxide emissions to fall to, say, $9.
- the Government’s compensation is locked in for a $23 tonne (and rising) tax, but its income may now fall.
Andrew Bolt’s columns appear in Melbourne’s Herald Sun, Sydney’s Daily Telegraph and Adelaide’s Advertiser. He runs the most-read political blog in Australia and hosts Channel 10’s The Bolt Report each Sunday at 10am, and his book Still Not Sorry remains very widely read.