Will the Australia’s carbon price floor influence on the prices for international units?

The Discussion Paper identifies, however, a number of further design considerations to be resolved. These include:

• How to define a class of international unit;

• Which exchanges to use to determine the market price;

• How to observe market prices;

• Which exchange rate to use;

• Whether to take into account futures prices; and

• What auditing arrangements would be required.

SO?

Excepting never-ending deliberations about the economic reasons for introducing carbon price floor, after all the cap-and-trade schemes without such an intervention seem to be more workable.

Another reflection is that the Australia’s generated demand for international units with restrictions linked to additional charges to adjust to the carbon price floor may be in the future an important driver for market tendencies. How to analyse and predict these tendencies will depend on the option finally chosen by the Australia’s legislators.