Carbon price framework announced

The Prime Minister Julia Gillard today outlined the government’s plan to cut pollution, tackle climate change and deliver the economic reform for Australia to move to a clean energy future.

The two-stage plan for a carbon price mechanism will start with a fixed price period for three to five years before transitioning to an emissions trading scheme.

The government has proposed that the carbon price will commence on 1 July 2012, subject to the ability to negotiate agreement with a majority in both houses of parliament and pass legislation this year.

The government will then use every cent raised to:

• assist families with household bills
• help businesses make the transition to a clean energy economy
• tackle climate change

The government said that the reason for having an initial fixed carbon price was to provide businesses with a stable and predictable platform to transition to a ‘cap and trade’ emissions trading scheme that will eventually be linked to international carbon markets.

The proposal is the result of the work of the Multi-Party Climate Change Committee (MPCCC) which has been meeting cooperatively to help deliver this economic reform.

The framework has been agreed by government and Greens members of the MPCCC. The other members, Tony Windsor and Robert Oakeshott, have agreed that the proposal should be released for community consultation.

The committee will continue to discuss other important elements of the proposal including the starting level of the fixed price, any phasing in of sectors of the economy, and assistance for both households and industry.

The opposition is saying that the government has broken its election promise.