Bob Brown has challenged Labor to justify a carbon price below $40 as the Greens push for “complementary measures” to lift the effective rate of Australia’s proposed carbon tax.
The Greens leader today urged the government to move quickly towards a European-level carbon price, equivalent to about $40 a tonne, saying that was effectively the international price.
Climate Change Minister Greg Combet said the eventual carbon price would be “well south” of that level.
But, as the government’s multi-party climate change committee moves to finalise details of the tax, Senator Brown called on Mr Combet to justify a lower starting price.
“If there’s a rationale behind that, then let’s hear it,” the Greens Leader said.
Confidential Deloittes research has reportedly found a $40 a tonne carbon price would be needed to encourage a national transition from coal-fired electricity to gas.
Greens Deputy Leader Christine Milne backed the finding, and urged Australia to align its carbon tax with that of the European Union to allow the systems to be more easily integrated.
The Greens’ climate spokeswoman referred to Deutsche Bank analysis which forecast the average European price on carbon between 2013 and 2020 to be 32 Euros.
“So you’re looking at a little bit more than $40,” she said.
“When you look at the Deloittes report saying the price would need to get to $40 in a reasonable time frame that is not inconsistent with what the European Union are saying.”
She said the effective carbon price would be heavily influenced by complementary measures.
“We haven’t reached an agreement on that. Clearly the starting price, the level of the escalator, depends on where we think the international price will be at a point at which we might change to a flexible pricing mechanism,” she said.
“The effective carbon price depends on what you are doing with your fossil fuel subsidies and what other additional measures might have to support the transition to renewables and other forms of energy.”
Mr Combet said the government would not implement a carbon price anywhere near $40 a tonne although he did not offer any alternative price.
“The Government is still working on the carbon price and it is yet to decide on the level of the starting price, but I can tell you that it will be well south of $40 a tonne,” he told The Australian Online.
In return, Senator Milne refused to nominate a preferred starting price for the tax, which is due to be legislated this year and come into effect on July 1, 2012.
Mr Combet refused to be drawn on the most appropriate carbon price.
“In terms of a starting price for the carbon pricing mechanism, the government certainly views it well south of $40 a tonne,” he said.
“We doing a lot of work at the moment, including the modelling thats being undertaken by Treasury… examining all of the scenarios at which changes take place in important sectors including the electricity generating sector.”
Opposition Leader Tony Abbott said the impact of the carbon tax would rise every year.
“The point of this tax is that whatever level it starts at it’s going to go up and up and up and I say to the Australian people: you trust this Prime Minister at your peril,” he said.
“Never forget that the Prime Minister said six days before the election there will be no carbon tax under the government I lead, (and) within a couple of months ‘yes there will be a carbon tax’.
“So this is a Government which is both incompetent and untrustworthy.”
