Climate Change bureaucrats have today confirmed that Europe will effectively set the rate of the carbon tax adding to Australians’ electricity bills, Shadow Parliamentary Secretary for the Environment Simon Birmingham said today.
It follows carbon tax redesign and linkage with the European Union announced by the Gillard Government in August.
The announced changes included a new 12.5 per cent ‘sub-limit’ on the use of eligible Kyoto units that can be used by Australian liable entities in meeting their carbon tax liability.
“What is the impact of the 12½ per cent cap? The impact of that is that we would anticipate that the domestic price in Australia the domestic carbon price would be set by the European price.”
Mr Blair Comley, Secretary, Department of Climate Change and Energy Efficiency, Senate Supplementary Budget Estimates, 15 October 2012*
Mr Comley has also refused to endorse Government/Treasury estimates of the carbon price in 2015, refusing even to describe current estimates of $29 as ‘accurate’ or even a ‘best estimate’.
Instead, Mr Comley has offered only that “in the current market the estimate is not implausible”.
Equally, however, Mr Comley said that a $50 price was “not completely inconceivable”.
“Australians could be paying anything for electricity under Labor’s carbon tax,” Senator Birmingham said today.
“If Europe makes its emissions reductions targets higher, Australia’s carbon tax will go up. If Europe reduces the availability of EU ETS permits, Australia’s carbon tax will go up.
“All we know about the level of carbon tax in Australia beyond 2015 is that, under Labor’s outsourcing of its carbon tax, the price will be set in Brussels with no consideration of the impact on Australian households or businesses.”
*More on the extent to which Europe will set Australia’s carbon tax rate and power prices:
From Senate Estimates, 15 October 2012:
BIRMINGHAM: If Europe were to take steps that saw them adopt a more ambitious target than they currently have, that would result in a higher carbon price in Europe and therefore a higher carbon price in Australia?
COMLEY: Other things being equal, that’s right.
BIRMINGHAM: If Europe were to, as they’re intending to do, or discussing doing, potentially restrict the number of permits that are available, that would result in a higher carbon price in Europe and, all other things being equal, a higher carbon price in Australia?
COMLEY: That’s right.
BIRMINGHAM: If the Australian dollar were to deteriorate relative to the European dollar, that will result in the relativity of the Australian carbon price being higher once those transactions occurred?
COMLEY: Assuming, again, that the thing that caused the Australian dollar change wasn’t either linked or had a consequence for the carbon price in Europe, which I think is actually a pretty important caveat here, then that would be the case.