Carbon market to stabilize: Combet

Federal Climate Change Minister Greg Combet is confident the international carbon market will stabilise in coming years.

From July 1, the government will make less than 500 of Australia's biggest polluters pay an initial $23 for every tonne of carbon they put into the atmosphere.

This will be followed by a market-based emissions trading scheme in 2015.

The aim is to cut 160 million tonnes of carbon dioxide from the atmosphere by 2020.

Mr Combet said there was a lot of development in the international carbon market.

The debt crisis in Greece was impacting on the carbon market, he said.

But Mr Combet was confident it would bounce back.

"I think carbon markets will stabilize, they'll become more liquid over the course of the next few years," he said.

He played down concerns that Australia's $15 floor price, once the fixed price period ends, could be much higher than the international price.

"I just don't think you should get too tangled up in that at this point in time," Mr Combet said.

The floor price will start at $15 a tonne and rise by four per cent a year until 2018, when the market will set the cost of permits unconstrained by either a floor or ceiling.

It's meant to ensure there's no shock when the fixed-price period ends in mid-2015 with a unit costing $25 a tonne.

A top-up mechanism is likely to be charged to make domestic and international units effectively the same price.

(Source:Trading Room)

 

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