Carbon Tax Floor Price to Go!
So it looks like Labor blinked. In the face of criticism from some segments of the business sector, they have agreed to drop the floor price of $15 that was to be enacted over the next few years. Instead, an agreement has been struck to limit the number of permits Australian businesses can buy from overseas to 12.5% of the total, as well as to limit purchases from developing nations. This should go some way to alleviating concerns of rorts that may have otherwise taken place when it comes to permits.
A decision has also been announced to link Australia’s carbon pricing regime to that of Europe’s as well as 3 other nations. The idea is that this will add legitimacy and be the beginnings of global framework for pricing carbon. Some criticism has come that this new agreement will see carbon pricing fall too low to have meaningful impact on decisions made by power-providers, however a counter-criticism is that the governments in Europe will begin to move to limit carbon production further, driving the price up from where it currently sits at $10 per tonne.