So here is an argument in The Conversation:
A recent agreement between Australia and China to cooperate on climate change could be a tipping point that makes the Coalition’s pledge to repeal the Carbon Pollution Reduction Scheme unachievable.
Under the agreement, Australia and China will establish a carbon trading experts group and conduct joint research as China moves towards its own national emissions trading scheme after 2015.
Given the Chinese commitment to carbon pricing and the role of Australian exports in their carbon market, it would be stupid for Australia to turn its back on the useful discussions enabled by the bilateral arrangement on carbon. The Chinese arrangement will be mirrored over time with our other trading partners. No rational government would undermine these arrangements.
I think they’re dreaming – but let’s assume for argument sake, that they are right. What is the proposed level of the Chinese carbon tax?
But the mooted starting carbon price of $1.55 (10 yuan) from the world’s biggest carbon-emitting economy has reignited business concern that Australia’s $23-a-tonne starting price from July 1 is too high and will damage business competitiveness.
It’s not just the Chinese who think carbon shouldn’t be expensive – the European markets think so too.
The European Union carbon market collapsed overnight after its parliament narrowly rejected a plan to prop it up by withholding permits, putting Australia’s emissions scheme under a cloud.
The price of carbon plunged by around 50 per cent to $3.23 and is predicted to fall even further to as low as $1.25 after the European Parliament rejected a proposal – by 334 votes to 315 – to postpone the sale of 900 million permits.
Markets are sending very clear signals – the politicians and dreamers are on route for a mugging by reality.