New South Wales Carbon Trading Plan Disintegrating, Opposition Claims - The Age

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NSW carbon trading scheme is on the verge of collapse, green groups and non-government politicians say. Under the Greenhouse Gas Abatement Scheme, companies get credits by cutting greenhouse gas emissions and sell them to companies needing to offset their emissions.

So the makers of energy saving devices such as special light bulbs or shower heads earn the credits and get income from selling them to polluters such as power stations trying to reach benchmark reduction targets. But NSW Greens MP John Kaye says the NSW market has been oversupplied by the government with cheap certificates, slashing the price on carbon. "It was only a matter of time until the price collapsed and the scheme became meaningless," he said in a statement.

The NSW price per tonne of emitted carbon has fallen from $11 to $6, making it uneconomical for companies earning the credits to trade them, The Sydney Morning Herald reports. Paul Gilding, the head of energy saving company Easy Being Green, says the major polluters also have stopped buying the credits because they are unsure what will happen at the federal level.

"Because of the lack of demand the price has therefore collapsed," he told ABC Radio. He says his company will fold by the end of next week unless changes are made to the scheme. The federal government set out in May to establish a national cap-and-trade carbon trading scheme by 2011. (Ed. - emphasis added)

EDIT

Not to worry - I'm sure nothing bad will happen in the intervening three or four years until the national carbon plan is introduced.

http://www.theage.com.au/news/National/Carbon-scheme-collapsing-green-groups/2007/09/11/1189276671024.html