Power companies have urged the Coalition to rethink its ‘direct action’ carbon plan, saying that it may cause them more difficulty than the Government’s emissions trading scheme.
The Australian Financial Review reports that the Energy Supply Association of Australia (ESAA) has urged the Coalition to change its plan to immediately scrap the carbon tax if it wins the federal election on September 14.
ESSA represents big power companies such as Origin, TRUenergy and International Power. It has supported an emissions trading scheme for a long time and the recent collapse in the European carbon price has only reinforced this view.
Last week, the European price of carbon fell dramatically and it is now trading at $3.75.
Australia’s current $23 a tonne carbon tax is scheduled to rise to $25 by 2015-16. At that time, it will be replaced by an emissions trading scheme linked to the European trading scheme.
“What we are seeing is the conditions in the market moving so quickly that there is a need to rethink the rules with a view to resetting or rethinking Direct Action,” ESAA chief executive Matthew Warren told The Australian Financial Review.
However, the opposition’s spokesman on climate action, Greg Hunt, confirmed on Tuesday that a future Coalition government will cut the carbon tax.
“We remain completely committed to the policy as it removes a costly tax on business,” he said.
“We have made it clear that setting of baselines is a matter for the white paper and we are encouraging organisations to make submissions at that time, if we are elected.”
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