Europe’s Carbon Prices Fall – And Australia’s Deficit Will Rise

Posted on Thu 01/24/2013 by

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Bolt New 01By Andrew Bolt ~CO2 Capture

Remember the assurances of the mendacious Climate Change Minister Greg Combet last August, when he linked Australia’s carbon price – now at $23 a tonne – to that of Europe from 2015?

Mr Combet repeated he was confident of the Treasury modelling, which predicts a $29 a tonne carbon price in 2015/16.

He was asked if the government would face a budget shortfall, in contrast to the $9.4 billion of revenue it had predicted the floating price would generate in the 2015/16 budget.

“It is three years away and the Treasury modelling is something that we stand by,” Mr Combet said.

Still confident, Greg? The European price you’ve linked us to has just taken another dive:

Yesterday’s closing price was 5.02, today it is 4.64 ($5.86). That’s a value loss of 8% in a single day. So far, for the month of January, EUcarbon has lost almost 40% of its value, from just below $7 a ton at the end of December.

Implications:

– the carbon price in Europe (and soon here) is too low to drive any shift to “green” power.

– Europe is too broke to get serious about cutting emissions, leaving Australia even more isolated.

– Australian business, knowing carbon prices will soon fall here, have little incentive to invest now in “clean power” technologies to cut their emissions.

– The federal Budget is going to spring a giant leak if compensation for a tax now of $23 a tonne outstrips the money the Government will earn from a tax that will fall to … what? $4?

Andrew Bolt is a journalist and columnist writing for The Herald Sun in Melbourne Victoria Australia.

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. He is also heard from Monday to Friday at 8am on the breakfast show of radio station MTR 1377, and his book  Still Not Sorry remains very widely read.

Read more excellent articles from Andrew Bolt’s Blog . http://blogs.news.com.au/heraldsun/andrewbolt/