First published in The Australian Financial Review, 8 July 2013
Ross Garnaut’s comments that there was now no obstacle to an earlier move to an ETS (Garnaut says yes, but’ to emissions trading", AFR, July 3) presuppose that both the government and businesses could get ready in time for such a change.
This would mean that a market mechanism would need to be up and running by April next year, which seems about as easy as pushing a very large rock up a very steep hill.
Regardless of whether a carbon trading scheme market could be operational by then, and in the interests of ameliorating the burden on Australian businesses at a time of increasing global competition, the Rudd government needs to reduce the artificial price on carbon in Australia in the interim. On July 1, Australia’s fixed price on carbon increased 5 per cent to $24.15 a tonne. Contrast this with the European price of 4.33 ($6.09).
From July!, 2015, the price of carbon will be set by the market and it is intended to link up with the European market. The link-up price is anticipated by experts to be around $5 per tonne, a far cry from both today’s $24.15 and next year’s proposed $25.15 per tonne.
Australia remains at an economic crossroads. Our macro-economic indicators remain relatively sound but continue to mask the soft underbelly of business.
The next 12 months, regardless of the election outcome, will be critical for many businesses. We encourage the government to use the mid-year economic and fiscal outlook report to recast the budget and to reduce the burden of the high price of carbon on Australian businesses and households.
Alex Malley, Chief Executive CPA Australia