Australian and European carbon markets will be linked in 2015, creating the world’s biggest emissions trading market, reported the Guardian in a recent article.
Under the deal struck by Canberra and the European commission, Australian liable entities will be able to buy up to 50% of their carbon permits in Europe from 2015. In 2018, European entities will also be able to purchase credits from Australia.
Australia’s carbon price, which controversially began in July as a fixed $AUD23/tonne tax, will move to an emissions trading scheme in 2015.
Originally, the scheme was designed with a $AUD15/tonne floor price (to take effect from 2015), a design feature intended to prevent the price crashing during the early years of trading.
It was criticised by businesses because it was significantly higher than (current) international prices (in Europe the price is €8 or $AUS10/tonne).
This meant Australian businesses would have to go through a complex set of adjustments to top up any international permits bought at a price below the Australian floor price.
Australia is the world’s biggest exporter of coal and iron ore. Australians also generate more carbon pollution per head than any other developed country, largely because of their heavy reliance on coal-fired power stations to generate electricity.
With a population of 22 million, the country is responsible for 1.5% of global greenhouse gas emissions.
Britain, by comparison, with nearly three times the population, is responsible for just 1.7%.
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