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Abstract:
Key elements A: Carbon pricing mechanism 1. Fixed price period – The carbon pricing mechanism commenced on 1 July 2012, with a price that is fixed for the first three years. The price starts at $23 per tonne and will rise at 2.5 per cent each year in real terms. 2. Emissions trading scheme – On 1 July 2015, the carbon price will transition to a fully flexible price under an emissions trading scheme, with the price determined by the market. Coverage Broad coverage from commencement, encompassing the stationary energy sector, transport (as described below), industrial processes, non-legacy waste, and fugitive emissions. International linking International linking to credible international carbon markets and emissions trading schemes from the commencement of the flexible price period. At least half of a liable party’s compliance obligation must be met through the use of domestic permits or credits. Industry assistance The $9.2 billion Jobs and Competitiveness Program provides significant support for jobs and protects the competitiveness of these emissions-intensive trade-exposed industries. The Program also ensures that industry, local communities and workers have a smooth transition to a clean energy future and that these industries have a strong incentive to reduce their carbon pollution. Energy Security An Energy Security Fund has been established to ensure there is a smooth transition which preserves energy security. Household Assistance Assistance for Australian households, through tax cuts and increased payments, to help them with increased living costs as a result of the introduction of a carbon price. Governance Climate Change Authority – advises on pollution caps, tracks Australia’s pollution levels and progresses towards meeting targets and undertake reviews of the carbon pricing mechanism. Clean Energy Regulator – administers the carbon pricing mechanism, the existing regulatory functions for the National Greenhouse and Energy Reporting Scheme, the Renewable Energy Target and the Carbon Farming Initiative. Productivity Commission – undertakes reviews relating to industry assistance, and carbon pollution reduction activities in other countries. Land Sector Carbon and Biodiversity Advisory Board – reviews and oversee land sector initiatives, providing advice to Government and ensuring the effectiveness of assistance. Energy Security Council – advises the Government on any emerging risks to energy security and may offer loans to coal-fired electricity generators for the refinancing of existing debt. B: Related Clean Energy Future programs Assisting manufacturing and energy efficiency A range of new and existing measures to encourage energy efficiency are targeted at households, businesses, communities, Government, buildings and transport. Renewable energy Investment in clean energy projects, including through the Clean Energy Finance Corporation – invests in the commercialisation and deployment of renewable and clean energy projects. Australian Renewable Energy Agency – improves the competitiveness of renewable energy and related technologies through supporting renewable energy technology innovation. Land use – Incentives for the farming, forestry and land sectors to reduce carbon pollution and increase the amount of carbon stored on the land.
