A slump in the value of carbon credits is the result of the Government getting itself in a tangle and undermining confidence in the Emissions Trading Scheme, the National Party’s energy spokesperson Stuart Smith says.
Climate Change Minister James Shaw responded by saying that was “a bit rich coming from the party that neutered the Emissions Trading Scheme for a decade and drove carbon prices to less than a dollar”.
There is speculation the size of the price drop took the Government by surprise, and that it may take the opportunity presented by a new Climate Change Commission report to try to shore up confidence in the Emissions Trading Scheme (ETS) later this month.
The broad concern has been that the Government could seek to prevent carbon prices rising to the degree needed to effectively curb emissions, in order to avoid further worsening the cost of living, especially during an election year.
The Government did not take up a recommendation made by the Climate Change Commission late last year that it should raise the minimum price at which it issues credits and tighten their supply to further discourage emissions.