Jun 22, 2012 - 8:00am
Last night’s Budget confirmed that 1 July will mark the end of an era when Australian businesses had a free ride on the emission of dangerous greenhouse gases. The budget puts pollution permit revenue to work towards affordable clean energy as well as household and business support, said The Climate Institute today.
“For two decades Australian businesses have been on notice that they needed to take responsibility for their greenhouse gas emissions and half a decade ago John Howard backed emissions trading,” said John Connor, CEO of The Climate Institute.
“Last night’s Budget confirmed that our largest polluters face a permit price on carbon pollution from 1 July and will help reduce Australia’s pollution by at least 12 million tonnes a year from 2015.”
“After a bitter public debate, many of those companies receive substantial free permits and face prices per tonne of $1 to $8, while others face $23 per tonne generating $7.7 billion permit revenue in the first year of the legislation.”
“What we are seeing in this budget is the pollution permit revenue at work, incentivising polluting companies to invest in low carbon innovations and backing significant investment for renewable energy, while at the same time supporting households and businesses.”
“Independent pricing regulators and analysis commissioned by ourselves, CHOICE and ACOSS has shown that the pass-through costs for households are in line with Treasury projections. This means that pension increases and tax cuts made possible by the permit revenue will leave low income households better off.”
“This budget backs the Clean Energy Finance Corporation, which will soon be legislated with a $10 billion fund dedicated to providing Australians with least cost energy in the realities of a carbon constrained future.”
“The budget also backs investment in carbon farming, renewable energy and environmental protection that will secure huge benefits for regional Australia, when combined with the renewable energy target legislation and the guarantee for investors of a continuation of a carbon price floor.”
“There are dangers in this budget if it is based on the assumption that any permit price will drive the domestic changes in our high carbon economy. The cut to the Tax Breaks for Green Buildings, saving $405 million, is regrettable as it forms part of a mix of energy efficiency, renewable energy and pollution pricing policies representing world’s best practice.”
“The $2.9 billion cut in overseas aid is also regrettable and places extra importance in providing alternative sources than the aid budget for financing international commitments to invest in helping poorer countries prepare for the impacts of climate change and clean up their development pathway.”
“Failing to cut fossil fuel subsidies like the $9.4 billion diesel rebate for mining industries is a missed opportunity.”
“Debate about the permit price in 2015/16 is highly speculative given the European price was $36 four years ago. But market fundamentals suggest that assuming the floor price of $15 would have been more realistic. Australia’s price floor would prevent a further impact of $2.4 billion if international prices are as low as $5 in 2015 as some speculate.”
For more information:
John Connor | CEO, The Climate Institute | 02 8239 6299
Kristina Stefanova | Communications Director, The Climate Institute | 02 8239 6299