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Australia's Clean Energy Plan Policy Briefing Paper

Date
19 July 2011
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Australia's Clean Energy Plan Policy Briefing Paper

The Climate Group Australia has published a Policy Briefing Paper in reaction to the Australian Government's recently announced Clean Energy package.

This briefing provides an overview and analysis of the key details of the Australian Government’s recent Clean Energy Future package – announced by Prime Minister Julia Gillard on Sunday July 10, 2011.

If it passes parliament later this year, the scheme, which includes an initial carbon price of $AU23 per ton CO2e, will end a policy log jam spanning almost a decade. The scheme is due to take effect from July 2012.

Below are a few of The Climate Group’s key takeaways from the plan:
  • Walking the tightrope. The initial price of $23 a ton is a good balance between a starting point that means something and one that is politically feasible
  • Certainty at last. Businesses now have the detail they need to look at the costs and opportunities that this presents. Once it is passed, it will deliver long overdue certainty and confidence to the market, unlocking crucial investment. The transition from a fixed price to a market based price is “hard wired” into the scheme and an initial price collar and ceiling will provide a buffer against price fluctuations
  • More than a carbon price. The complementary measures and funding contained alongside the price on carbon will encourage the growth of innovative, green technologies and jobs
  • Communication will be key. Julia Gillard still has a tough battle to convince the Australian public that this package is a good idea. The government has not sold the idea well so far, reflected by the fact that 58%were opposed to a carbon tax, with 14% unsure just prior to the announcement. The change in language from the government from talking about a carbon tax to a clean energy future is a good start
  • Australia may surprise itself. The fixed price may lead to more abatement than the treasury modeling predicts. Previous emissions trading schemes in New South Wales and around the world have achieved higher reductions for lower cost than predicted at the outset.  Treasury modeling also doesn’t include the extra impact that the negotiated closure of power stations in the scheme will have

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