Posts Tagged ‘Rob Oakeshott’

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Unclear implications from EU carbon link

28 August 2012

The rumor I blogged about last week is no longer a rumor. Australian Climate Change Minister Greg Combet today announced the Government has done a deal, approved by Cabinet, with the European Commission, independent Rob Oakeshott, and the Greens. They agreed a number of changes to Australia’s emissions trading scheme (ETS, which will succeed the present fixed carbon price from 2015), summarized by Climate Spectator:

The $15 floor price on Australian carbon permits will not be implemented.

Companies will be allowed to use CERs [offsets through Kyoto] up to a maximum of 12.5 per cent of their liability, down from 50 per cent.

From 2015-16, companies will be able to use European ETS allowances to meet their liabilities under the Australian scheme up to a maximum of 50 per cent of their liability (minus any CERs they might also wish to employ).

The Australian government and the European Commission are negotiating on establishing a two-way link to commence no later than July 1, 2018. This would mean Australian government carbon permits could be purchased by companies overseas to meet their liabilities under the EU ETS.

Important details such as the accounting rules, allowance of third-party offsets, and role of land sector offsets are yet to be agreed. A full agreement is expected mid-2013.

An analysis in The Age says “at face value, the announced change looks like a business issue.” Wrong: the details of climate change policy affect us all, because they determine the amount of greenhouse gases emitted and therefore the extent of climate change. Surely it is a political journalist’s job to look beyond the “face value” of policies. That’s what I will make some attempt to do here. Read the rest of this entry ?

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What would rumored carbon tax changes mean?

21 August 2012

It is rumored in the newspapers that the Australian Government is considering certain changes to its carbon price. I have been mulling over this for ten days because it’s difficult to assess the overall implications of an unconfirmed proposal lacking full details, and I have mixed feelings as some aspects of the rumored proposals are potential improvements and some are potentially regressive. However, my impression is the possible outcome has been leaked to gauge public reaction, so I figure I should express my thoughts, provisional though they may be.

Here’s the context: the carbon price policy as it currently stands was negotiated last year by the Multi-Party Climate Change Committee (MPCCC), consisting of Labor, Greens, and independent MPs; was legislated in November and came into effect last month. The policy is full of holes, but climate activists are failing to campaign for stronger action and industry lobbyists are campaigning to undermine it even further.

The first portent of the rumored changes was back in May when independent MP and MPCCC member Rob Oakeshott unexpectedly threatened to renege on part of the agreement. Oakeshott threatened to disallow regulations to establish a $15 floor price when the $23 carbon tax becomes an emissions trading scheme (ETS) in 2015. The floor price is in my opinion one of the best features of the Government’s policy, providing some price certainty so investors can confidently shift investment from high-carbon to zero-carbon or low-carbon assets. If there is no floor, the carbon price could collapse and limit emissions reductions instead of encouraging them – particularly given companies will be allowed to buy cheap international offsets (presently valued in the single digits). Read the rest of this entry ?