Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Hansard source

A double backflip, as the member for Maranoa says. During the first year of the CPRS, the government is proposing that an unlimited number of emissions permits would be sold for $10 each. In the following years, a set number of emissions permits will be auctioned based on a cap set by the government. In theory, the price that emitters are willing to pay for the permits will increase as the supply of permits is reduced. As permits become more expensive, it will be economically viable for emitters to invest in low-emissions technology, and there lies the theory of the matter.

However, the problem is that you will also be able to purchase unlimited permits in the international market. In the absence of an international agreement on carbon emissions, international demand for offsets may remain low and it is likely that emissions permits will continue to be available overseas at relatively low prices. The availability of inexpensive international carbon offsets will seriously undermine the basis of the government’s proposed scheme. In some international markets, carbon offsets are selling for as little as 10 per cent of the government’s asking price of $10 per tonne. Privately negotiated transfers of carbon offsets on the voluntary Chicago Climate Exchange were selling at between US85c and US$1.

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