Australia’s new prime minister can’t count on big polluters to support his plan to stop charging them for greenhouse-gas emissions, according to the Carbon Market Institute.
While business groups such as the Minerals Council of Australia have criticized the carbon price as a “dead weight on the economy,” few individual companies have spoken up to endorse Tony Abbott’s plan to scrap what he calls a carbon tax, said Peter Castellas, chief executive officer for the Melbourne-based institute, which surveyed about 200 of the country’s largest emitters before the Sept. 7 election. It plans to publish a study later this year on the costs of repealing carbon trading in Australia.
“Those conversations are yet to be had by liable entities in Australia,” Castellas said yesterday at the Carbon Forum Asia in Bangkok. “Lots of money has already been invested. Those costs have already been sunk.”
The Carbon Price Mechanism passed by former Prime Minister Julia Gillard in 2011 requires more than 300 of Australia’s largest emitters to pay about $24.15 a metric ton for greenhouse gasses this year, the highest price in the world. EnergyAustralia, a unit of Hong Kong’s biggest electricity supplier, would have to write off investments if Abbott prevails with his repeal, said Kenneth Wong, manager of carbon credits at China Light & Power, EnergyAustralia’s parent company.
Electricity futures prices show the implied costs of emitting carbon in Australia plunged 18 percent in the two days following the election, bringing its monthly decline to 55 percent, according to data compiled by Bloomberg. At their lowest, prices indicated an 80 percent probability that Abbott will overturn the carbon price, according to Bloomberg New Energy Finance.