Spot CERs are currently quoted at EUR 3.81 in January 2012.
The Australian carbon tax will commence at AUD $23 (approx EUR 15.00) in July 2012, rising at a marginal fixed percentage for the next three years, until 2015 when full trade commences. Upto 50% of Australian liabilities can be covered through CERs and other international offsets. So given the prevailing spot CER price will the Australian spot price crash severely to match the CER price?
It wont as the price floor will prevent that. Companies will still be able to meet 50% of their obligations with international instruments such as CER, However they will be liable to pay the Australian Government the difference between the purchase price and the floor price. There is a discussion paper out at present on exactly how this may be implemented.
The other issue is what will the international price for carbon in 2015? From reading reports from Barclays capital it appears the price today is a consequence of oversupply emerging from two elements, the rush to issue industrial gas CER prior to the post 2012 EU ban and the NER 300 auctions of EUA by the EIB that resulted in the market going from long to short. The CDM pipeline from UN RISO suggests much less in the line of CER from post 2012 and the supply demand situation in 2015 is far from clear.