Isra-Mart srl: Pressure on Greens to lower carbon price

www.isra-mart.com

PRESSURE is building on the Greens to accept a lower carbon price after Kiwi Prime Minister John Key talked up the success of his country's low-cost emissions trading scheme yesterday.

New Zealand has already introduced a carbon price, capped at a modest $NZ12.50 a tonne.

That's about $A10 - well below speculation that, if Australia prices carbon, it will be about $26.

Mr Key said New Zealand's ETS had already encouraged a shift to renewable sources of energy and the planting of more trees.

Businesses were happy, he said, and predictions that the scheme would cost households $NZ150 a year had also proved accurate.

"What I can tell you about the emissions trading scheme in New Zealand is it's worked," Mr Key said.

His comments provided a welcome boost to Australian PM Julia Gillard as she continues negotiations with the Greens and independent MPs over the precise carbon price and details of household compensation.

Start of sidebar. Skip to end of sidebar.

End of sidebar. Return to start of sidebar.

"We love Kiwis, they're family for us, but I think Australians would be asking themselves if the Kiwis have had the guts to go and price carbon, why can't we?" Ms Gillard said.

"Well my answer is: we can. We can catch up with our Kiwi friends."

The Government wants to price carbon from July next year and move to an emissions trading scheme within three to five years.

Both leaders held out the long-term prospect of coupling their individual schemes into a common emissions trading market.

"We will have officials working together on linking the two schemes," Ms Gillard said.

Mr Key said it made sense to trade carbon emissions across the Tasman because the two economies were so closely linked.

The previous NZ Labour government introduced an ETS with a $NZ12.50 carbon price scheduled to increase to $NZ25 by 2013.

But Mr Key's conservative-led minority government is reviewing the timetable and is expected to decide its future at the end of the year.

So far, Mr Key said he believed price signals that flow from carbon pricing were producing desired results.

"In the time that we've had it in place, all of the applications for new electricity generation has been in the renewable space," he said.

"We are seeing a change in behaviour when it comes to forestry."