Tuesday, August 28, 2012

Australia to join EU's emissions trading system

I suspect this is a move to a cheaper Emissions Trading Scheme, as the article notes the current low EU ETS rates are far below the future base price that had been legislated for Australia, but I'm not sure the rationale for the decision are as important as a broader carbon market, which I see as positive.

Australia to join EU's emissions trading system | EurActiv:
Australia will scrap its planned floor price for carbon emissions and will link directly with the European Union's emissions trading system by 2018, Climate Change Minister Greg Combet said today (28 August).
Australia, one of the world's highest per capita emitters of pollutants blamed for causing climate change, imposed a fixed €19.08 per tonne carbon tax on around 300 of its biggest polluting companies in July, covering around 60% of emissions.
The €12.45 floor price was due to underpin the scheme when it moved to a floating emissions trading scheme in July 2015.
The floor price adjustment is the first major change to Australia's controversial plan to price carbon following concerns from businesses facing higher costs than in Europe.
Read the entire article at EurActiv:

A better take on why Australia joined the EU ETS is now posted at Roger Pielke Jr.'s blog
In a surprise move the Australian government has announced that it will abandon its plans to transition its newly implemented carbon tax into an Australian emissions trading system, and sign on the the European ETS.
There is no other way to read the Australian government's decision other than that Prime Minister Gillard crying "uncle" and punting the issue far into the future. How does this play out? Here are a few initial thoughts:
  • Gillard gets to say that she never really wanted the carbon tax, and then claim that joining the EU ETS is a step forward;
  • Abbott gets to claim victory as the carbon tax lasted only 59 days before Labor decided to terminate it rather than transition it to a domestic ETS...

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