Radical tax robs energy industry of certainty

Finally, the mechanism has to deliver emission reductions at least-cost.

To achieve this, the mechanism must be comprehensive in its coverage of gases and sectors. It will also not be consistent with a robust reform agenda envisaged by the Prime Minister unless across all jurisdictions it replaces, and stops the introduction of, other policies and programs that cannot deliver emission reductions at a price lower than the mechanism price. Again the mistakes made with the RET which have seen its costs to electricity consumers in 2011 balloon from around $400 million to over $1,300 million – a cost of over $100/tonne CO₂ - must not be repeated.

Least-cost also requires that those liable to pay the fixed price or acquit permits must have access to the lowest cost offsets, whether they be domestic or international. Here the framework announced by the Prime Minister already appears to be wanting as there is no mention of the use of offsets in the fixed price period.

The Multi-Party Committee and the Government are still a very long way from meet the challenge of the Prime Minister's vision for Australian industry, existing and new, while at the same time placing a price on greenhouse gas emissions.