Last week when the European Parliament voted down a proposal to prop up the EU Emissions Trading System’s languishing carbon price by postponing the sale of 900 million emission allowances until the back-end of this decade the price fell to below AU$4. There are obvious concerns about the legislated linking of the Australian carbon price to the EU scheme in mid-2015. Treasury had forecast an EU price of at least $29 in 2015.

Radio National’s PM program had a roundup of political commentary. Julia Gillard on the 7.30 Report was very clear. The legislation was there, it was hard enough to get through the parliament in the first place and we’d have to work with it.

Big business, quick off the mark, was suggesting that link with the EU should occur earlier, so they could buy permits while they were cheap.

Ross Garnaut said, don’t panic, the ETS is only one measure and targets may tighten by impacting on the price: Continue reading European ETS →