Crikey Clarifier

May 20, 2013

Crikey Clarifier: why is the EU carbon scheme hitting our budget?

Europe's low carbon price hit Australia's budget last week in a big way. Erwin Jackson from the Climate Institute explains why, and looks at what might happen next.

Last week’s federal budget showed the impact that Europe’s emissions trading scheme is having on Australia’s carbon scheme. The EU carbon price is currently a low 3.55 euros (A$4.67) per tonne of CO2.

From 2015, when Australia’s carbon scheme is due to morph into an ETS and will be linked with the EU carbon market, our carbon price is now forecast to be much lower than expected. In the short term, this means less revenue from Australia’s carbon price — hence some budget cuts to climate programs last week.

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2 thoughts on “Crikey Clarifier: why is the EU carbon scheme hitting our budget?

  1. Mark from Melbourne

    You might want to point that out to Mr Abbott…

  2. Scott

    “this is why the UK has implemented a minimum carbon price in its domestic electricity industry of around A$25/tonne”

    Oh come on. From the 1st of April 2013 (when the floor starts), the price floor is actually around 4.94 UK (or around $7 AUS); in 2014, it rises to $15 AUS. It is only in 2015 that it accelerates to around $28 AUS (this is assuming constant exchange rates), but it wouldn’t surprise me if this changes, depending on how the EU scheme is going. It makes no sense for the UK to begger themselves when the EU price is low (and alot of these price targets were set in 2011)

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