Wednesday, August 29, 2012

Australia to Join European Emissions Trading System

The Australian Government and European Commission have agreed to link the Australian and European carbon emissions trading systems, by 1 July 2018. Australian and European businesses will be able to buy and sell carbon units on the Australian emissions trading scheme and the European Union Emissions Trading System (EU ETS).

The linking will require the minimum price set for carbon in Australia to be removed to make it compatible with Europe. The lower price of carbon in the European system may cause some adjustment problems for Australia.

The linking also has implications for how, and if, Australia runs its own on-line system for carbon trading. The Australian Government was tendering for a carbon trading system. But it may be simpler to use the European system directly. There have been problems with the security of the European system, but these should be resolved by 2018.

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