Australia: Norton Rose at Carbon Expo Australasia 2012 - Day 2

Hot Topic

Today's hot topic is about the Government's commitment to having a robust emissions trading scheme in Australia that successfully links into the international arena. So at your next social function when the conversation inevitably turns to the "carbon tax", you may wish to raise these three points, being the key themes presented in the sessions today:

  • Australia is by no means the first to price carbon – Australia is amongst the last of the OECD. The 27 European Union countries (and others who have opted in) have been operating under an ETS for a number of years, a number of state and regional schemes are in operation and development across North America (including in the Californian economy), New Zealand has an ETS, China is developing at least seven emissions trading schemes of various designs with a view to a national scheme to be implemented by 2017, South Korea has legislated for an ETS to begin in 2015 and a host of developing countries are now pursuing emissions trading as their preferred policy option for developing as lower carbon economies;
  • Carbon credits are generally very rigorously certified – the carbon credits eligible for use for compliance with the Carbon Pricing Mechanism (CPM) in Australia are created through sets of rules that are painstakingly developed to ensure that a credit represents a real, identifiable and conservatively estimated reduction of a tonne of carbon dioxide equivalent emissions. Each project is audited and the measurements of emissions reductions verified. It is more likely that a carbon credit represents more emissions reduced than a single tonne; and
  • None of us are climate scientists* – when we suspect heart disease, we go to the cardiologist; when we suspect cancer, we consult the oncologist; so when we suspect that the climate is (or is not, depending on your view) warming due to an increasing imbalance in the gaseous makeup of the atmosphere, we should let the climate scientists do their thing.

*only applicable when not a climate scientist or in the presence of one.

From the sessions

Climate change: the critical decade (a climate science update)

  • The measurable effects of climate change are tracking in line with (and in many cases, at the upper limits of) the projections of climate scientists
  • Between 2000 and 2050 the world has a 'carbon budget' of about one trillion tonnes of CO2 equivalent emissions
  • In the first 10 years of this period, the world has used over 30 per cent of this budget
  • Known fossil fuel reserves represent around three trillion tonnes of CO2 equivalent emissions if fully utilised.

Address of the Hon. Mark Dreyfus QC MP, Parliamentary Secretary for Climate Change and Energy Efficiency

  • Linking Australia's scheme with Europe is a major step in the development of carbon markets internationally
  • 94 per cent of OECD countries have in place or are planning emissions trading or carbon pricing schemes
  • The Carbon Farming Initiative represents a significant opportunity for farmers in Australia
  • Soil carbon will play an important part in Australia's carbon reduction task, but according to the CSIRO modelling, is likely to be less than 1 per cent of the emissions.

The Australian carbon price: the first six months

  • Uncertainty around the repeal of the carbon price mechanism (CPM) was the principal topic discussed in this session with three broad views being taken:
    • GE: even if there is a short term uncertainty, GE takes the view that there is long term certainty because ultimately there will be a carbon price
    • Delta: uncertainty is affecting forward sales of power, with counterparties having difficulty pricing in the risk of repeal of the carbon price
    • Pacific Hydro: the uncertainty is a real problem for generators, affecting their ability to value existing assets and to assess risks associated with the purchase of new assets.

Low carbon finance in Australia: do we finally have an integrated, credible, low-carbon co-financing model?

  • The CEFC is rapidly setting up its international mechanisms and policies in order to reach its goal of being able to start getting funds out the door on 1 July 2013
  • The CEFC has identified key market gaps/failures where it can provide finance for emerging clean energy technologies where the private sector will not
  • As a general position, the CEFC does not intend to take a significantly greater risk in the projects it invests in than the commercial sector. It is, however, prepared to have its loans repaid on different terms.

Quote of the day

"When I spoke here last year, the Australian Parliament was just hours away from its historic vote to introduce a price on carbon.

Since then we have endured wild rhetoric and daily doomsday predictions that the start of the Clean Energy Future package on July 1 this year would tear down entire industries and bring the Australian economy to a standstill.

The reality has been very different."

The Hon Mark Dreyfus QC MP, Parliamentary Secretary for Climate Change and Energy Efficiency

Looking forward – Friday , 9 November 2012

Today we will hear from:

  • the Honourable Mr Greg Combet AM MP, Minister for Climate change and Energy Efficiency
  • Blair Comley, Secretary, Department of Climate Change and Energy Efficiency
  • The Honourable Greg Hunt MP, Shadow Minister for Climate Action, Environment and Heritage
  • Andrew Grant, CEO, CO2 Australia
  • Yvo de Boer, Special Global Advisor, Climate Change and Sustainability, KPMG.

This is in addition to our own Elisa de Wit and Anthony Hobley.

Please stay tuned for final wrap up of Expo which will be sent on Monday morning.

Please come and meet our global climate change team who will be at our trade fair stand at Expo. We look forward to seeing you there.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Noni Shannon
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