EFFECTIVE AUSSIE EMISSIONS PRICE W/O NEW COSTS

Australia Power Industry To Respond Strongly To Carbon Price – Study
Ray Brindal, March 29, 2011 (Dow Jones Newswires via NASDAQ)

"Australia's electricity sector will respond strongly to the introduction of a carbon price as it will prompt early switching of fuels to gas and other less emissions-intensive technologies from coal, according to…one of the government's key advisors on climate change, Ross Garnaut.

"…[W]hile electricity prices will rise in the coming years, any increase associated with a carbon price likely will be less than recent rises given higher capital costs in the industry, while rising gas and coal prices from the resources boom will also contribute to higher power costs in coming years, [Garnaut Climate Change Review – Update 2011, Update Paper eight: Transforming the electricity sector] said."

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"…Deutsche Bank's head of carbon emissions research, Mark Lewis, said Australia needs to avoid further procrastination on legislating a local carbon market and move quickly on carbon pricing lest it is left out of the global carbon market and clean technology investment sector…

"The government plans to start pricing carbon with the aim of cutting emissions and pollution from July 2012, subject to the federal parliament passing the legislation. Details of the carbon pricing mechanism will be issued towards the middle of the year, as the government is still working on details…Garnaut said the introduction of a carbon price will cost households about A$5 a week, for which they will receive a tax cut…[Garnaut’s 2008 Climate Change Review and] eight interim updates address developments across many subjects including climate change science and impacts, emissions trends, carbon pricing, technology, land and the electricity sector. A final report [will come by May 31]..."

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"Garnaut doubts the introduction of a carbon price will threaten physical energy security. Even so, it might be prudent to…[establish] an Energy Security Council to implement measures to counter energy market instability, and the judicious provision of loan guarantees to high-emissions generators during the transition to carbon pricing, according to the paper.

"Australian Prime Minister Julia Gillard believes pricing carbon is an essential economic reform and wants a price fixed for three to five years, before transitioning to a cap-and-trade emissions trading scheme…[T]he proposed carbon price will raise revenue from the 1,000 largest carbon polluters, who will be responsible for the first time for the pollution they create. The funds raised from the emitters will be used to offset the impact of price increases on households and businesses…"