Significant changes to Australia's pollution price announced today, following extensive negotiations between the government, the Greens and the European Commission, will deliver a big step forward for genuine action to cut pollution both in Australia and globally.
"This is a red letter day in building global cooperation to tackle global warming, but it is also a hugely important step in building a clean energy economy in Australia and making our pollution pricing scheme as effective, credible and long-term as possible," Australian Greens Leader, Senator Christine Milne, said.
"Just when the world is seeing ever clearer signs of global warming in wildfires and drought in America, record Arctic sea ice melt and heatwaves in Europe, linking the Australian and EU pollution pricing schemes creates critical global momentum for this most sensible approach to cutting pollution.
"This should put to bed the nonsense idea that Australia is acting alone on global warming - we are now a key part of the world's biggest carbon pricing scheme."
The changes, allowing immediate linkage with the EU scheme, will replace the three year floor price with on ongoing 12.5% limit on the use of the cheapest imported permits. This will lift the Australian price to the EU price, give investors certainty of a robust price well beyond 2018 when the floor price was scheduled to end, encourage more serious pollution cuts in the domestic economy and ensure maximum credibility for all pollution cuts credited in the Australian scheme.
"The floor price was always meant to drive more investment in renewable energy, energy efficiency and carbon farming here in Australia, giving investors more certainty on price into the future. What we have now negotiated will deliver that more effectively, particularly for the period after 2018 when the price floor was scheduled to end.
"The Greens have also always highlighted the risks of accepting large numbers of the cheapest international permits and we are very pleased that this arrangement limits those permits to 12.5%.
"European governments are currently working hard on plans to limit the supply of permits, lift their price and cut more pollution. It is widely expected that the European permit price will be close to or above the level our floor price would have been by 2015, when trading begins in Australia.
"What we have negotiated with the government will put a permanent tight limit on the use of the cheapest credits from the global market in our scheme, increasing its credibility, buttressing the price and encouraging polluters to deliver more of their pollution cuts with genuine action at home.
"In addition, by allowing Australian companies to immediately start buying and banking permits from Europe, these changes will make it even less likely any future government will want to undermine the global market by getting rid of Australia's pollution pricing scheme.
"This sensible, forward-thinking economic reform shows up once again the economic ignorance, political opportunism and short-termism of Tony Abbott and the damage he would inflict on the Australian economy and community if he ever became Prime Minister."