Christine Milne (Tasmania, Australian Greens) Share this | Hansard source

Mr President, I ask a supplementary question. I note that the minister once again failed to address the question I asked, and that was to tell the Senate what are the disadvantages of allocating free permits to pollute. I got a time line but I did not get an answer to the question about what is wrong with free permits. I had hoped to hear about the anticompetitive effect, the creation of perverse incentives, the transaction costs, and the failure in Europe of free permits. So I ask the minister whether she is aware that Professor Garnaut said in November last year:

Managers and analysts of the first phase of the European ETS recognise that the large and inequitable distribution effects of allocating free permits to established emitters, even when the carbon price was passed on to households, was a fatal flaw. Questions of distribution are therefore fundamentally important to the environmental integrity of mitigation policy, and not only to distributional equity.

Will the minister rule out the free allocation of permits?