mike mckensey, westpac: carbon permits, the cap and trade system - australia’s place in the global...
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Mike McKensey, Head of Carbon Trading, Westpac delivered this presentation at 2013 Australian Wind Energy Conference. The event gave conference attendees key insights into how the new Abbott Government may impact future developments in the industry. The conference has a long-standing history of bring together key policy stakeholders, government representatives, project developers, energy companies and regulators. For more information about the annual event, please visit the conference website: https://www.informa.com.au/windenergyconference.TRANSCRIPT
Carbon trading
with the Institutional Bank.
Nov 2013 | Mike McKensey
The Carbon Pricing Mechanism
The expected price of carbon in Australia
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Source: Westpac
Fixed price
Floating price
ACU price
Historical EUA and CER prices
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Repeal of the “Carbon Tax”
Repealing the ‘carbon tax’
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Draft legislation released in October 2013 would:
• Remove the carbon price from 1 July 2014
• Remove the equivalent carbon price on heavy transport fuels /
synthetic GHGs
• Abolish the Climate Change Authority
• Cancel additional income tax compensation scheduled for 2015
• Give the ACCC greater powers to monitor and enforce price-gouging
Timing and likelihood of repeal
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16 June 2014
Provisional
surrender for
13/14 year
01 July 2014
1) Senate changes hands
2) The 14/15 emission year begins
01 Jul 1419 Nov 13 01 Sep 14
01 Sep 14
ACU buyback
begins
1) Labor and Greens control Senate
2) Double dissolution possible
Senate make up after 1 July
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Party Seats
Coalition 33
Labor 25
Greens 10
Palmer United Party 2
Independent 1
Liberal Democrat 1
Family First 1
Democratic Labor Party 1
Aus Motor Enthusiasts Party 1
Aus Sports Party 1
Total 76
?
What does the market think?
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Source: Westpac
Direct Action
Emission Reduction Fund
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Source: Westpac
Commodities, Carbon and Energy – Westpac Institutional Bank
‘terms of reference’
1. Sources of “low-cost, large scale abatement
2. Facilitating the “development of abatement projects”
3. Cost effective auction mechanism
4. Operational responsibilities and governance
5. Monitoring, verification, compliance and payment arrangements
6. Transitioning from the Carbon Farming Initiative
7. Business As Usual emissions baselines
Questions
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What baseline will be used?
What penalties will be imposed if liable entities emit over their baselines?
What will occur if counterparties don’t deliver emission reduction?
What will be the process for approving projects?
How will the Government meet its target of 5% below 2000 levels by 2020?
Thank you
Commodities, Carbon and Energy (CCE)
Mike McKensey
Head of Carbon Trading
+61 28204 2883
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Unique credentials...
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The offset market (fundamentals by BNEF)
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