Today, about 40 countries and over 20 sub-national jurisdictions either have or are planning a price on carbon, including China and Europe.
The Coalition’s repeal of the carbon price is out of step with international thinking. The ALP should implement an effective Emissions Trading Scheme in its first year of government without further compensation to electricity generators.
History has shown that the ALP’s previous price on carbon was effective: emissions from the sector it covered (electricity) fell during the two years the carbon price was in place (July 2012 to July 2014). When the price was removed, emissions from electricity rose.
The key weakness of the previous scheme was the unnecessary compensation paid to brown coal generators. The purpose of the carbon price or an emissions trading scheme is to send a price signal – compensating for the price signal defeats the purpose and renders the policy less useful. Analysis has shown that the brown coal generators received an enormous windfall benefit as a result of the compensation packages. A new Labor government should provide no compensation to generators under an ETS.