Australia and EU to link Emissions Trading Schemes

The Australian Government and the European Union (EU) have, during bilateral talks in Brussels on 29 March, confirmed their strong commitment to working towards linking the Australian and European Union emissions trading schemes (ETS).

“Linking our schemes is a priority for the Australian government. The EU ETS is the largest emissions trading scheme in the world. Together, the schemes will provide access to a wider range of options for cost-effective emission reduction,” Climate Change and Energy Efficiency Minister Greg Combet said.

Minister Combet and European Commissioner for Climate Action Connie Hegegaard noted that linking the two schemes would further develop the international carbon market and welcomed increasing participation in carbon market activities across the world.

“32 countries, including the 27 European Union member states, have emissions trading schemes in place, as well a number of state-based systems in North America,” Minister Combet observed.

“China is piloting trading schemes and has plans for a national Emissions Trading Scheme after 2015. An ETS is also planned in the Republic of Korea and, sub-nationally, an ETS will start in California in 2013.”

Commissioner Hegegaard said: “We are working to strengthen the international carbon market, enabling effective climate action across the world, at least cost.

“Integrated carbon markets will also provide incentives for the development and diffusion of low carbon technologies that can assist countries’ transition to low emissions development pathways.”

The announcement follows the December 2011 release by Minister Combet and Commissioner Hedegaard of the Terms of Reference for the Australia Europe Senior Officials Talks on Climate Change. The inaugural meeting of the Senior Officials Talks on Climate Change was held in Brussels on 27 and 28 February 2012. Senior officials discussed closer collaboration between Australia and the EU on the development of international carbon markets and the possibility of linking the EU Emissions Trading System and Australia’s Carbon Pricing Mechanism. The work plan agreed by Minister Combet and Commissioner Hedegaard will guide further discussions on linking.