And that creates a $5B per annum hole in the Australian carbon tax projections once it converts to a floating price. Refer http://www.theaustralian.com.au/national-affairs/climate/eu-carbon-collapse-deals-blow-to-australia/story-e6frg6xf-1226622388327. I heard the Greens on the radio today hoping that the EU fix the price – otherwise known as increasing taxes. The point of a floating price is that you set the level of emissions you’re happy with, and give permits to that level. The price then goes up and down based on how hard it is to reach that level of emissions. Apparently if it ever becomes too easy the right thing to do is to put the price up. Anyone would think the aim was to subsidise renewable energy generation (many Greens have investments in renewables…) rather than to reduce emissions.
Could be interesting times. The Libs have finally worked out that this is a problem.