Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

The Treasurer has provided the following answer to the honourable senator's question:

Chart 3.5 in the Strong growth, low pollution: modelling a carbon price report shows EU ETS permit prices from 2008 to present. This period was selected as Phase II of the EU ETS was considered the most appropriate period for examination of future carbon prices. The first trading period of the EU ETS (which ran from 2005 to 2007) was designed as a pilot phase with different policy settings to the current EU ETS and the proposed carbon price mechanism — particularly in relation to the banking of permits and sectoral coverage.

Underlying market prices for financial instruments, such as EU carbon permits, are better reflected by trend movements, rather than temporary price fluctuations. For this reason a 3 month moving average was applied to the data to look through temporary daily movements.

Based on settlement prices from IntercontinentalExchange, from 3 January 2011 to 18 August 2011 (164 trading days), there were:

Over the same time (32 weeks), there were:

Since 2005, the lowest recorded EU ETS settlement price was €8.20 (on 12 February 2009) and the highest was €32.90 (20 April 2006). The EU ETS settlement price for 18 August was €12.22.

The Government’s proposed domestic carbon price mechanism will only apply to the 500 biggest polluters in Australia. These businesses have experience in managing risk in relation to a range of factors such as variable electricity prices, commodity prices and exchange rates. As such, they are well equipped to manage a variable carbon price.