Australian ETS could soon be worth 11billion AUD (€6.8bn),

Oslo (16 July 2008) 

On the basis of proposals outlined today (16 July, 2008) in a Green Paper issued by the  Australian Government, the annual value of trades in Australian Emissions Units (AEUs) could  amount to as much as AUD 11billion (€6.8bn) within the first few years of operation, according to  Point Carbon, the leading provider of market intelligence, news, analysis, forecasting and advisory services for the energy and environmental markets. 

Point Carbon envisages a relatively lenient cap in the first phase (2010-11 to 2012-13) equivalent to a 2-6% cut in emissions, or between 540-563 Mt Co2e/year. This is in view of the current upward trend in emissions as well as the government’s pledge to ensure smooth implementation of the scheme. The total annual value of AEUs to be released by the government in the first period will be approximately AUD10.4bn (€6.4bn), assuming a 5% cut in emissions and current
average market prices of 19 AUD/tonne (€11.7). 

Taking the same cap and assuming a level of trading in line with growth seen in the EU ETS, the value of traded credits could reach 11billion (€6.8bn) within three years of operation. 

Commenting on the Carbon Pollution Reduction Scheme (CPRS) Green Paper by the Australian government, William Greene, senior analyst at Point Carbon, said, ” While recognising the proposals laid out in the paper are not final, the carbon pollution reduction scheme represents a major step forward in emissions trading scheme design. It does away with politically-driven free allocations by appointing a central, independent regulatory body. Furthermore, its wide coverage
and openess to high-quality international carbon credits will ensure that emissions reductions are acheived at least possible cost.” 

Greene added, however that mechanisms proposed in the Green Paper for compensating lowand medium-income households would be difficult to implement; ”calculating the exact financial impact of the CPRS on Australian households is nigh on impossible. The increased cost of electricity is one aspect but price rises in consumer goods caused by the inclusion of manufacturing industries is far harder to ascertain.” 

Point Carbon will be releasing a comprehensive analytical report on the likely shape and value of the Australian Carbon Reduction Scheme in the coming weeks. 

Note to editors 
The Carbon Pollution Reduction Scheme is the main proposed policy instrument for  Australia to reduce its emissions of greenhouse gases in line with its international obligations. Australia ratified the Kyoto Protocol on climate change in December 2007 following the election of Labor Prime Minister, Kevin Rudd. 

The carbon market has seen substantial growth since its modest start in 2003. Globally, the traded volume of carbon contracts has increased from 28 Mt in 2003 to 2.7 Gt in 2007, with forecasted further growth to 4.2 Gt in 2008.

For comments or further more information, please contact:
Candida Jones
PR Manager, Point Carbon
Mob: +44 (0) 777 5754 763
E-mail: press@pointcarbon.com

William Greene,
Analyst, Point Carbon
Tel: +47 2240 4992
Email: wg@pointcarbon.com  

For US press enquiries, please contact:
Jenna Agins
Intermarket Communications
Tel: +1 212 754 5613
E-mail: jagins@intermarket.com  

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