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Jul 09 2011

Roundup of Carbon Tax Leaks

On Monday it was announced that the Multi-Party Climate Change Committee’s negotiations were sufficiently advanced for the full policy to be announced at noon tomorrow, followed by a Prime Ministerial broadcast at 6:30 PM. The MPCCC has reached agreement, and independent Andrew Wilkie (who is not on the committee) has indicated he will support the policy, giving the Government the 76 votes it needs to get it through the House of Representatives and 40 votes in the Senate (where it needs 39). The coal industry is about to launch a multi-million dollar advertising campaign against it.

New details are being leaked out every day and it’s difficult to keep up with them all. So here’s a list of known or rumored decisions. Some of the details are hazy but will no doubt soon become clear. I don’t consider anything certain until the big announcement tomorrow.

  • 1 July: The MPCCC have discussed buying out some coal power plants and replacing them, though it sounds like they will be replaced by gas, not renewables. Notably, this is similar to one of the Liberal Party’s policies.
  • 3 July: The Government announced the carbon price will not include petrol, although it may be covered in the future. Oil is one of the three main fossil fuels, and excluding it halves the number of companies covered from 1,000 to 500. Liberal leader Tony Abbott complained the exclusion of petrol made it a “great disappearing carbon tax”, despite having campaigned daily for months against taxing petrol and credited himself with its exclusion.
  • 5 July: 90% of households will be compensated, 70% will be fully compensated, and three million will be overcompensated.
  • 5 July: Even Greens leader Bob Brown says Australia will not phase out coal in the next decade (though Greens Senator Lee Rhiannon rightly says it is possible).
  • 6 July: The Government announced free permits for coal – the worst of the conventional fossil fuels. The amount is said to be smaller than the $7.3 billion over ten years for coal in the old CPRS, but instead granted over five years. Labor freely admits the industry’s size would double by 2050 under its policy.
  • 6 July: CSIRO modeling says under a $26 per tonne carbon tax, fossil fuels will still supply half of Australia’s energy by 2035, and possibly even by 2050 with carbon capture and storage.
  • 7 July: Though one of the MPCCC’s original principles was revenue neutrality, reports say the policy will cost $4 billion over four years, or $1 billion per year. Some of the funds will come from cutting fuel tax rebates (worth $5 billion in 2010-2011 but it will only be cut for some industries).
  • 8 July: The Greens announced a new independent body called the Australian Renewable Energy Agency (ARENA). ARENA will subsume $1.5 billion of existing renewable energy projects – the argument is management by an independent body will stop renewable energy money being constantly shuffled around. ARENA will also receive at least another $1.7 billion (apparently over ten years). It’s not clear where the money will come from – perhaps from the Clean Energy Finance Corporation will be funded by carbon tax revenue ($10 billion over five years). Thankfully, carbon capture and storage will not be counted as clean energy.
  • 9 July: The starting price is reported to be $23 per tonne.
  • 9 July: The Government will be able to buy $1 billion of carbon offsets in the land sector, but they won’t count towards Australia’s international target. Companies can also buy carbon offsets, but they will be capped.

More tomorrow…

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