Dear Kamaljit Kaur Sangha,

You have asked a very good question, that is match to my profession as well.

Australia's carbon price mechanism commenced in July 2012 with a fixed carbon price of $23/tCO2-e, rising at 2.5 per cent per year until 2014–15. This is known as the fixed price period.

Reference: http://www.environment.gov.au/climate-change/emissions-reduction-fund/cfi/kyoto-and-non-kyoto-activities

I hope it will fulfill your requirement.

Regards.

Muhammad Imran

Dear  Kamaljit,

I heard recently of an agreement between the EU and Australia for sales of carbon credits between the two countries: the EU sells and Australia buys. In fact, in the EU there is an excessive availability of carbon credits and therefore the price is very low from € 3 to € 7. If then the price is fixed in Australia, who earns the difference between $ 25 and $ 5 (average price in the EU)?

I'd like to know by the expert @Muhammad.

Thanks and cordiality

Ting Fa Marg

Dear Ting Fa Marg,

I am Student of this field, not Expert. As Concerned to The Difference of 25-5$, It will be earned by the authority who invest on it. 

Regards.

Muhammad Imran

Thanks to both of you.

Re the first answer by Mohammad Imran: C price @23/t was fixed under the labour government (CFI program). The recent LNP govt. changed that program to Emissions Reduction Fund and is proposing to conduct C auctions. However, I am not sure if there is any baseline price set for C auctions?  Its a bit too loose...any idea on C price will be helpful in the current situation please.

@ Ting- good to know about this aspect, I was not aware of Australia buying C credits from Europe...there will be a lot of Credits available in Australia itself that will help Aus farmers. I agree that there is a lot of difference in price. But, I wonder if this trade can actually happen? -any papers/references pl.

Regards

Kamal

Thanks a lot Benton. This makes it clear to understand the baseline. However, I wonder $5 or $6/t of CO2-e is a very low price and may not break-even for the landholders/pastoralists/indigenous stakeholders.  Any suggestions pl.

When can we expect the first such auction? and if you can provide a rough idea what is an acceptable price from the govt. perspective? Are there any scenarios of trading with Europe for C?

Thanks, and I look forward to hear your views.

Kind regards

Kamal

Benton is right. The ERF auction is intended to be 'blind' - that is, no-one will know the results. The government has stated that its chief criterion for awarding acceptable bids is PRICE - that is, the lower the prices for winning bids, the larger the number of tonnes of abatement it can buy for its budget. It may well be that, within the additionality rules, bidders with projects which can afford to invest for very low carbon prices (sub $10/tonne, I suspect) will be the successful ones. There have been no auctions as yet.  Regard, Bill (Sydney)

Thanks Bill.

I guess the Government - Climate website suggests that the process will start in July 2015. But, I personally feel that it may not be a good price for the landholders who may commit to put efforts for sequestering or abating C emissions?  Whether you or Benton know of any pro/cons of having 'blind' auctions and how it can impact the regional/rural communities? and if there is any minimum baseline considered for C price?

Thanks to you, Benton and others for sharing views.

Kamal

Dear Kamalijit,

I am not yet able to send you the reference because I read on line the news.

But I have prepared for you a graph with the Prices 2012-2015 of all the auctions held in EU. I am sure that this original contribution of mine will be of your interest. It has been mede in Honor of the RG.

Nice regards to you and to the RG fellows.

Ting Fa Marg

Click on the graph to enlarge it.

Thanks a lot Ting, for doing this and sharing with all of us.

It will be useful, and I would be interested to see how it performs here compared to well-established European market...

THANKS AGAIN!!

Kamal

Thanks Benton, yes I agree (with fear) that this blind auction process will help the mining industries, by large. Landholders will still struggle to earn any C income. Are we expecting auctions in July 2015?

Lawrence as Benton mentioned, there is no C baseline price. Its doubtful how it will reduce C emissions. 

I wonder if C tax (after cap limit) could have been a better scheme, at least for taxing the big polluters/industries?? any thoughts? (May be C tax could be combined with ERF - applying the latter to land/other land activities but excluding mining that suits the former)

Kind regards

Kamal