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Speaker 1: But now, as we suggested this time yesterday, the carbon

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Speaker 1: auction was going to be another bust. No bids were

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Speaker 1: made yesterday. It's the second auction of the year, so

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Speaker 1: the government misses out on hundreds of millions of dollars.

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Speaker 1: The Minister of Climate Change, Simon Watts, is with us

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Speaker 1: on this. Simon, very good morning.

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Speaker 2: To you, Very good morning, Michael. Thanks for having me.

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Speaker 1: Not at all. No one's more interested in the carbon

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Speaker 1: market than I am. So the last government completely and

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Speaker 1: utterly cocked the thing up. You ironically have done the

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Speaker 1: same thing by doing good stuff ETS on farmers, etes

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Speaker 1: on forest. But what that means is if you've put

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Speaker 1: uncertainty into the market, and when you put uncertainty in

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Speaker 1: the market, no one turns up. Is that fair?

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Speaker 2: I don't think it is fair. The reality is the

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Speaker 2: effectiveness of the ETS isn't determined by an individual market outcome,

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Speaker 2: and what we saw yesterday was the reality that demand

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Speaker 2: wasn't meeting the supply at the price which was in

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Speaker 2: play on the government market, and there was no participation.

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Speaker 2: Those units move forward to the next auction. But you know,

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Speaker 2: these players, if they want units, there is a secondary

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Speaker 2: market and that's operating, you know, pretty reasonably at the moment.

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Speaker 1: The price you're setting your main market at, and if

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Speaker 1: you just transfer a whole lot of unsold stuff to

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Speaker 1: the next action, the same thing's going to happen like

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Speaker 1: it did last year.

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Speaker 2: Yeah, well, there's a lot of factors that play in

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Speaker 2: terms of driving the overarching price and I don't comment

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Speaker 2: as minister around that, but what I am focused on

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Speaker 2: is making sure we've got a credible market. Hence why

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Speaker 2: we stopped the review that the current the last government

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Speaker 2: had in play, why we've been putting through what we

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Speaker 2: think is from pretty sensible changes. But the big key

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Speaker 2: aspect is the release of our emissions reduction plan. What

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Speaker 2: are we going to do in the next five years

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Speaker 2: in addition to the ets to get the emissions down,

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Speaker 2: And that'll be coming out in early July exactly.

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Speaker 1: But that's my entire point. No one knows what that is,

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Speaker 1: and because no one knows what it is now is

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Speaker 1: turning up to an.

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Speaker 2: Oction well fair enough, but not long to wait. And

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Speaker 2: regards the release of that, you know, we're just over

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Speaker 2: two fifty days in to this government. There's a lot

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Speaker 2: on We've had to stabilize a lot of aspects. But

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Speaker 2: we've been working damn hard in the background to get

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Speaker 2: a plan and in place to send a clear signal

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Speaker 2: to the market around what our intent is. Because words

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Speaker 2: are good, but we need to follow that through with that.

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Speaker 1: How far short of Dutton are you and pulling out

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Speaker 1: of the Paris deal because it's unrealistic.

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Speaker 2: Yeah, we're nowhere near where they are at. And I

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Speaker 2: don't comment on other other countries governments and all of that,

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Speaker 2: but we've been very clear we're committed to our targets.

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Speaker 2: We've got prime ministerial targets around our domestic emissions. Early

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Speaker 2: indications are that we're looking good in regards to the

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Speaker 2: domestic missions budget. We'll have more information in our plan

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Speaker 2: around that. But you know, look at it is challenging,

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Speaker 2: but we're finding the balance between you know, not killing

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Speaker 2: industry and not doing stuff that isn't practical, letting the

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Speaker 2: market do what it can, but actually supporting the market

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Speaker 2: to do what it does. The corporates like from Terror

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Speaker 2: and that are already doing a whole lot of that stuff.

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Speaker 2: Why because the customers and the consumers overseas are demanding it,

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Speaker 2: Not because the government's telling them to do it all.

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Speaker 1: Right, Well, we'll look for auctions three or four and

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Speaker 1: see it works. Simon appreciate it. Ministry of Climate Change,

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Speaker 1: Simon Watts. For more from the Mic Asking Breakfast, listen

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Speaker 1: live to News Talks at B from six am weekdays,

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Speaker 1: or follow the podcast on iHeartRadio