Immediately after his election in September, Abbott said scrapping the tax was “a very early item of business.” Abbott won the vote partially on the Liberal-National Coalition pledge not to recognize the Labor Party’s 2007 mandate to implement an emissions trading scheme.
But GE vice chairman John Rice told the Australian Broadcasting Corp., “We still believe that over time there needs to be a price on carbon, there will be a price on carbon,” Bloomberg Businessweek reports.
He said investors are seeking clarity on the issue, and that as the global economy improves, more countries are likely to resume discussions on carbon pricing.
The situation in Australia, where over 300 large emitters must pay an average of $24.15 per metric ton this year, continues to be uncertain. Abbott’s coalition does not control the Senate, which could block a repeal of the tax.
In August, Virgin Australia indicated in its updated financial guidance for the year ending June 30, 2013 that the carbon tax was having a negative impact on the company’s performance. Farmers also complained that the carbon tax is significantly increasing their energy costs, despite evidence that other factors are having a greater effect on electricity prices.
In July, then-prime minister Kevin Rudd announced that the country would replace its carbon tax with a market-based trading system one year ahead of schedule. The change is expected to sharply cut the July 2014 cost of carbon. The Australian market system will also link to its European counterpart – meaning that the low carbon prices seen in Europe could now become an Australian problem as well.
Tamar Wilner is Senior Editor at Environmental Leader PRO.