Good evening, my name is Anthony Hobley. I am a partner with Norton Rose; I am Global Head of Climate Change and Carbon Finance.
I have been based in Sydney Australia, with Norton Rose Australia for the last 15 months or so, and have been heavily involved in the debate around a price on carbon and climate change in Australia.
I am currently in London, where we have just finished a seminar organised jointly between Norton Rose, CMIA and Austrade, to look at the Carbon Pricing Mechanism and the clean energy legislative package, which is currently passing through the Australian federal government.
We had speakers from Norton Rose (myself), Vivid Economics, and Westpac, one of the major Australian banks.
We had an audience largely drawn from London and Europe, who have experience of the EU emissions trading scheme. Much of the discussion was on understanding the Australian carbon pricing mechanism, should it be passed, later this year, and how that is likely to interact in the global carbon market.
The key issues I think that came out are that many people feel that the scheme is likely to pass this time. Many of you who know anything about the debate on carbon climate change in Australia will know that there have been many attempts before which have not passed.
The scheme is effectively designed with a default position which implements the Australian 5% target, should the government fail to set caps once the legislation is passed, which should address major political uncertainties in the event of a change of government. There is a lot of interest around whether or not the scheme could be repealed or rolled back, should there be a change of government.
Again, I think the conclusions were that it would be, whilst possible, extremely difficult.
There was also much discussion around the different political climates in Europe and Australia.
I think once many of those in London, with that European context where you have a political consensus and you have a business consensus on the need to tackle climate change, understood that at the moment that is not the case in Australia, and that this is very much a hot political potato, they could then understand some of the design elements and actually the need to provide significant compensation, and a package for support for industry to protect jobs and competitiveness.
So once that context was explained I think some of the design elements in this scheme were understood.
I think the London market represented at the seminar welcomed, I think, many of the potential investment packages - so for example, the Clean Energy Finance Corporation and the $10bn that will be available, and I think there were a lot of raised eyebrows at the fact that this is more than double the UK’s Green Investment Bank.
So effectively, a country, the UK, with 65 million people is deploying something like $4.8bn and Australia, a country of 20 million people, is deploying $10bn in addition to money to support renewable energy, through the Renewable Energy Authority, and the Clean Technology Package, which adds up to another almost $5bn.
These, I think ,were some of the key issues and points of interest and discussion, and finally I think obviously from a global carbon market perspective represented in London, there was a lot of discussion and interest around the extent to which the Australian Carbon Pricing Mechanism trading scheme will link with the international carbon markets through offsets, and there is a lot of interest, I think, from players in the market to be able to supply such offsets from the Clean Development Mechanism into the Australian market.
Ultimately in the longer term, I think members of the audience wanted to understand if and when an Australian scheme was likely to link internationally - and it was felt that this would, possibly, happen in the medium to long term, but not in the short term.
Thank you very much.
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