CIG has learned that the Australia's government has revised figures for predicted earnings from the future sale of carbon permits recently saying there now remained little room to offer more compensation in order to secure political support for the scheme.
The government had targeted carbon trading to begin by the middle of 2011, but legislation for the scheme is stalled in parliament, with the government in talks on possible amendments with the opposition, which is demanding more money for the coal and electricity quarters.
The most recent budget and economic predictions, CIG understands, indicate that the plan would loose an estimated $1.1 billion in its initial 2 years instead of the previously forecast small profit, leaving little in the way of compensation for coal mines and energy companies.
"They don't leave a lot of room for any further discretionary decisions," a Treasury spokes person announced to the press recently.
CIG has learned that the government intended to use the income from the sale of carbon permits to compensate homes and businesses for increased energy and fuel costs, and to assist the nations big polluting export firms to contend with overseas rivals that don't face domestic carbon costs.
The government's mid-year budget has laid the blame for the disparity on the increased value of the Australian dollar, which has risen 24% against the U.S. dollar since May, thus dropping the predicted Australian dollar price of carbon permits.
The proposed project will cover 75% of Australian emissions from 1,000 of the biggest companies and become the 2nd domestic trading platform outside of Europe.
