I dont get the Libs compromise posn at all. A 2012 ETS startup with a low carbon price. Isn't that just the initial carbon price for the permits, then industry trade them as they see fit? If they expect the price will go up in future the market price will follow that trend. The futures market is already trading carbon at 20$ per tonne. Either the market is going to set the price of carbon, or it isn't. If it is we can't control it.
If factories decide to exceed the carbon the have permits for, what happens. Surely the just get a fine. The cost of non-compliace has to be worked in to the cost of the permit. If the fines are big, as the will have to be for ETS to work, the permit cost will rise.
How are permits allocated? Some govt official gives each factory x-amount? Or do they just realise 50 billion tonnes worth of permits onto the stock exchange and let the factories and spectators batttle it out? If so i think we'll find that the price of the permits has SFA to do with the issue price even withing minutes of release.
Does someone out there have a clue on this?
