Carbon price:
Doug Clark writes: Re. “Euro vision: Australia’s new carbon regime explained” (yesterday, item 2). What I can’t get my head around is at what point the government gets the money from the certificates to do good works, and the EU solution is not making it clearer.
I keep thinking of a company raising capital by issuing and selling shares to investors at the issue price. This is the primary market, and the issuing company gets the money. The company may then list on the stock exchange and its shares are traded. This is the secondary market where buyers and sellers come together to trade shares, but the issuing company gets nothing from these secondary trades.
With the ETS, the government issues the certificates and polluters must buy them at the set price (which will now be tied to the EU market price) if they want to keep polluting. Is this like the primary market, and the government keeps the money? Then there is a secondary market in the certificates, especially in Europe and the certificates are traded pretty actively.
So the polluters have the choice: they can either buy certificates on the secondary market (which is cheaper at the moment) or buy new ones from the government. If the market price is cheaper, why would you ever buy from the government? Clearly they’ll have to track the market, or offer a discount, or people will just buy on the market and the government won’t raise any revenue for good works.
Have I missed something?
Nigel Brunel writes: Cathy Alexander wrote:
“Until then we were the southern hemisphere’s mouse that roared on climate change.”
With respect — New Zealand was and is the only country outside of the EU with a federal ETS. Although we — New Zealand — are not a mouse, more of a microbe.
Jeffrey Bleich:
Terry Quinn writes: Re. Yesterday’s Editorial. Crikey wrote:
“There’s an argument to be made that Jeffrey Bleich is one of the most powerful people in Canberra. And you’ve probably never heard of him.”
First Crikey tells its subscribers that high profile Jeffrey Bleich, US Ambassador to Australia, could be one of the most powerful people in Canberra. Fair call. Then Crikey tells its subscribers they probably haven’t heard of him. Game set and match a clanger!
- Crikey is proud its Canberra correspondent Bernard Keane has filed a wide-ranging, topical interview with the US Ambassador to Australia. Tick
- Crikey thinks the ambassador arguably is “one of the most powerful people in Canberra”. Tick
- Crikey thinks its subscribers are dills. Tick
- Crikey therefore thinks its subscribers probably haven’t heard of the ambassador who arguably is one of the most powerful people in Canberra. Tick
- Crikey actually tells its subscribers this! Tick
- Crikey thereby pulls the rug from under the very article it is promoting — about a high profile ambassador talking about a high profile widely reported issue on which he has already been quoted in mainstream media such as The Australian, the SMH and the ABC. Tick
- Crikey thereby embarrasses its Canberra correspondent Bernard Keane. Tick
- And the clincher … Crikey insults US Ambassador Jeffrey Bleich (probably a subscriber himself so make that a double). Tick
Brilliant!
@ Terry Quinn,
Well put. The editorials have been woeful for some time now. According to Item 1 in today’s bulletin, there’s a wealth of editorial experience exiting from the Fairfax buildings. It’s time for Mr Beecher to make a couple calls.
@ Doug Clark
This is the start of the Australian Government’s article ‘Flexible-price phase — fiscal implications’ on its Clean Energy Future web site –
‘The Government raises revenue from the sale of Australian carbon permits.
‘During the flexible price stage, an overall limit (or pollution cap) will be placed on annual greenhouse gas emissions from all covered sources of pollution. There will be no limits on individual sectors, firms or facilities.
‘Each year, the Government will issue permits up to the quantity of the pollution cap. Each permit will represent one tonne of pollution. Some of these permits will be allocated free of charge to businesses, to support jobs and competitiveness, and help strongly affected industries make the transition to a clean energy future. The remaining permits will be sold by the Government at auction.
‘The price at auction will be determined by the market. Firms will compete to buy the number of carbon permits they need to meet their obligations.’
The article then elaborates and anticipates several further questions.
There are probably many very powerful people in this country who I have not heard of, or whose names I do not know. Before Wednesday’s articles, Jeffrey Bleich was one of them.
Even if I was familiar with who he is, I would not be insulted by the suggestion that as a general reader, I have “probably never heard of” someone whose name is not necessarily high profile in other circles around the country. I suspect that Jeffrey Bleich is not insulted that that someone living in Albury had not heard of him, and may feel that the exercise was constructive if I have taken an interest in what he has to say.
On the other hand, Terry Quinn seems to be implying that in his view, an Australian who does not know the name of the US Ambassador to Australia is a “dill”. Perhaps I have my priorities wrong, but I think that is much closer to an insult than the way that Crikey approached the subject.