Australian Carbon Demand in 2015-16

Updated on Monday, October 15, 2012 at 23:46 by MCJ

Updated on Thursday, October 25, 2012 at 16:29 by MCJ

In the September issue of Point Carbon’s Carbon Market Australia-New Zealand newsletter,  Cecile Langevin writes that

[Point Carbon] expect[s] the emitters covered in Australia’s emissions market will have 57 million fewer permits than they need in the year 2015-2016

and

the market price will be set by the international cost of U.N. Clean Development Mechanism (CDM) credits for the first two years, and then by EU Allowances (EUAs) the last three years of this decade.

Based on my rough calculations (below), the Australian market should demand 240-245 MtCO₂-e in 2015-16, and the government’s (official) projections are even higher, so I’m struggling to reconcile that with Point Carbon’s 57 million estimate.

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Why Drop the Price Floor? Taking a Gamble on the EU

Updated on Wednesday, August 29, 2012 at 14:28 by MCJ

Updated on Thursday, August 30, 2012 at 16:27 by MCJ

I couldn’t make much at first of today’s announcement by Greg Combet, Minister for Climate Change and Energy Efficiency, that Australia was going to link its ETS with the EU ETS, and oh, by the way, we’re dropping the price floor.

That Australia and the EU will link their schemes good news, but it’s an expected development. Dropping the price floor, on the hand, had been speculated about (notably by the AFR; well done, Marcus Priest), wasn’t really part of the original plan.

As I wrote back in May, a price floor has some good things going for it, despite being technically challenging, and as it’s only regulation the government has the numbers to pass it even with Rob Oakeshott’s opposition. So my initial reaction was that the floor price had been put in the “too hard” basket and the ETS linkage was just used to hide the announcement somewhat.

I’ve since heard, however, that dropping the price floor was a condition of the EU agreeing to link the schemes. This makes more sense.

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Does It Make Sense for Australia to Restrict Its Export of Fossil Fuels?

Once we dig up and sell the coal, are we still responsible for the emissions? ‘Stop exporting fossil fuels’ has not just economic, but moral components, given that much of our fuels go to developing countries.

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Wish One Is ALWAYS for More Wishes

At a party celebrating the 5th birthday of the Centre for Policy Development, I was asked the following question:

“If you had three wishes to change the world to help the environment, but that change had to occur through political processes, what would those wishes be?”

I found the question fascinating, and pondered it for a minute or two. Think about your own answers for a while, if you like. (You know it’s a happening party when people stare into the middle distance rubbing their chins thoughtfully for a while.)

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Surrendering to the Idea of a Price Floor

From July 2015, the Australian federal government will set the price of the permits in its emissions trading scheme free – within limits. The government intends to introduce a price floor and price ceiling until at least 2017/18.

This is good news for emission reduction activities whose viability depends on prices several years hence, such as larger, more complex projects. Further, the goal of abatement at least-cost should be balanced against the goal of abating as rapidly as possible; should reaching current targets be cheaper than expected, a floor price can ensure a minimum level of spending on abatement.

Last December, the government released a discussion paper and called for submission on the price floor, which combines a reserve price for Australian carbon units at auction with an ‘international unit surrender charge’ that ensures international carbon credits cost at least as much as domestic units. Four options are being considered for the international unit surrender charge.

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State Climate Schemes Are Still Worthwhile under a Carbon Price

In justifying their recent abandonment of state-based climate schemes, the governments of Queensland and Victoria have both claimed that the schemes will be redundant under the federal emissions trading scheme (ETS) that begins in July. Yet this justification is only a smokescreen, as a carbon price can well exist with other environmental and climate schemes.

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Pulling Carbon Offset Figures Out of the Air

Measuring just the running costs isn’t the best way of accounting for the environmental effects of air travel. Taken in combination with the vast difference between the apparent abatement costs for our airlines and the cost of carbon internationally, I’m highly sceptical of the efficacy of the carbon offsets our airlines offer.

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IETA GHG Market Report 2011

The 2011 report on the state of greenhouse gas markets by the International Emissions Trading Association begins with a chapter on Australia, of which I am the lead author.

The report is available online.

Details of the Clean Energy Future Package

The Clean Energy Future legislation is lengthy and boring, but it’s important: these 18 bills (and a few more to come in the first half of next year) lay the framework for what will be the primary driver of Australia’s attempt to mitigate dangerous anthropogenic climate change – assuming they pass, of course. This post is a summary of some of the CEF’s nitty-gritty details.

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What Are the Visions of Australia’s Future Reflected in Our Parties’ Policies?

When the Government released its climate change package on July 10, it was under the moniker of a “Clean Energy Future”. This is, ostensibly, a fairly clear vision for where Labor sees Australia in 2050 and beyond. However, the package is a mish-mash of measures that don’t deliver clear policy signals to achieve this clean energy future. While this is partially a result of the multi-party committee that spawned the package, the rhetoric the Government employs is ambiguous as to precisely what sort of society they see Australia moving toward.

So where are we really going with all this? If the world follows the suggestions of science and reduces CO2-e emissions to constrain dangerous climate change, what place is this future do our parties foresee?

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