Pricing Carbon Has Passed the Acid Test

I am quoted in today’s Sydney Morning Herald piece on the carbon pricing scheme.

Tomorrow, the nation steps over the threshold of carbon pricing into a domain where pumping out greenhouse gas has an economic price as well as an environmental one. The federal government’s Clean Energy Bill is a compromise with which no one is entirely happy. But the consensus of economists is that it is likely to work well enough to cut emissions by 5 per cent, the minimum supported by the major parties.

“If you assume the political will to implement the scheme is there, a huge ‘if’, then the question is whether the scheme is designed well enough to achieve its goals - I think it is,” says Martin Jones, a researcher at the Centre for Energy and Environmental Markets and University of NSW. “The mechanism is an effective one: emissions trading schemes have proven records of reducing emissions.”

New South Wales Bins Carbon Trading Scheme

Updated on Thursday, April 5, 2012 at 13:50 by MCJ

Updated on Friday, April 13, 2012 at 18:58 by MCJ

I am quoted in today’s Point Carbon article on NSW’s announcement that GGAS is ending. (Readable with a free trial.)

Australian state New South Wales will abandon its Greenhouse Gas Abatement Scheme (GGAS) on July 1, when the federal government introduces a tax on CO2 emissions, state Energy Minister Chris Hartcher announced Thursday.

The baseline-and-credit scheme has operated since 2003, targeting emission cuts primarily in the state electricity sector, but also in industry and forestry.

 The phase-out was expected, but leaves market participants with 16 million surplus credits that will be ineligible for use in the nationwide scheme.

 This spurred Minister Hartcher to demand in local media Thursday that the federal government compensate the credit holders.

 However, market observers dismissed Hartcher’s claims.

 “It’s been clear from the outset of GGAS to all participants and government that GGAS would finish when a national carbon pricing scheme started,” said Martin Jones, a researcher at the University of New South Wales.

 “The problem of excess supply and an upcoming end date have been on the radar for at least half a decade, and insufficient efforts to address it have little to do with the federal government,” he told Point Carbon News.

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