KELLY: Have you looked at the Bloomberg New Energy Finance prediction which suggests that the international carbon prices could be as low as $5 a tonne by 2020 let alone by 2015?
COMBET: Well I have discussed a range of the forecasts while I have been in Europe with people fairly expert in the carbon markets and I haven’t found too many that support that view, that’s for sure.
It’s clear when you talk to analysts about where the European price is going to be by 2015. They are all saying that in fact it could be well ahead of where the Australian Treasury modelling is in terms of a higher price. There are some saying that you could have a European price as high as $50, for example
(GREG) Combet said Treasury modelling of carbon pricing had proven to be accurate and, if anything, conservative. “How about we have a bit of trust in that than some ridiculous allegation made by (Opposition Leader) Tony Abbott about the impact of carbon pricing,” he said . . . “There is every reason to believe that carbon markets will recover and we’ll stand by the Treasury modelling.”
Mr Combet repeated he was confident of the Treasury modelling, which predicts a $29 a tonne carbon price in 2015/16.
This reality is unfolding in Europe. A tonne of emissions is now $3.20, and is expected to fall to $1.20 compared with $7 earlier this year, a 2008 starting price of nearly $50 and Australia’s $23 carbon tax, which will increase to $24.15 on July 1. The European carbon price crash is not unprecedented. The voluntary Chicago climate exchange traded permits for about $7.50 in 2008, but bottomed out at 5c when the scheme closed in 2010…
European politicians have recognised how little public appetite there is to increase their hip pocket costs to cut emissions and reward rent seekers.
The collapse of Europe’s latest attempt to breathe life into its moribund carbon trading scheme is a hammer-blow for proponents of a global carbon trading system. So much has gone wrong with Europe’s scheme that a global trading regime may be out of reach for decades, even if the carbon price recovers.
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.