Australia’s carbon changes will hit its budget surplus

March 31, 2017 by Ronjoy Bezbarua

(Source: Drive) Australia’s carbon price will be set by the volatile European market from 2015 under changes announced by the Gillard government that could hit the budget bottom line and cut incentives for switching to green energy. Australia’s scheme will be linked directly to Europe’s, meaning the cost of carbon to Australian businesses – and therefore the prices that are passed on to consumers – will depend on the price in Europe. The changes were cautiously welcomed by industry and environmentalists also would place strict limits will be put on how many permits big emitters can buy from cheap carbon reduction projects in developing countries. However, European carbon permits are trading just below $10, down from more than $20 about 18 months ago. If it stays at the present price, there is a danger it will not be high enough to encourage investment in clean energy in Australia. The tax cuts and household compensation that offset the carbon price are fixed but the government’s revenue to cover those costs depends on a robust carbon price. Read full article….

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