Australian Carbon Trading Scheme

On the 4th of June, 2007,^[1] Prime Minister John Howard has announced that Australia would be under a new Carbon Trading scheme and would be in place domestically by the year 2012 ^[2]. This development to implement an ETS (Emissions Trading Scheme) was announced after the final report of the Prime Ministerial Task Group on Emissions Trading was submitted to the Federal Government. The scheme would be similar to those in other countries such as the United States of America and the European Union. This works similar to carbon credits where businesses must purchase a license to emit carbon emissions. Similar to carbon credits, a firm will originally purchase a license from the Federal Government. A surplus in credits can be traded while a shortage in credits will either result in the firms purchasing excess credits from other firms or a face a penalty from the Government.

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Trading

The Australian Stock Exchange expects to start a Futures Market for the trading of carbon emission permits ahead of the proposed introduction of the scheme by 2012 ^[3]. "Once sufficient detail of the ETS is known, ASX will be in a position to facilitate emission trading at the earliest opportunity," said Robert Elstone, the Chief Executive Officer (CEO) of ASX Ltd. The ASX has already appointed a new group to gather industry information to design a new future's market for this scheme ^[4].

Criticism

The new scheme can be seen as reactive with the Australian Labor Party stating that the scheme is "too little, too late." However, Howard is confident that the new scheme could be in place and be better than that already in place in the European Union. This can also be seen as reactive since 80% of the Australian voting public stated that they wanted their Government to do more on climate change ^[5]. Also, the report on Carbon Emissions, where this Scheme has been developed from, also warned that Carbon Trading would mean higher energy prices for consumers ^[6]. The Prime Minister's refusal to submit a target for the Scheme has been criticized by green groups and climate experts with John Connor, the head of The Climate Institute of Australia said that without targets to reduce emissions, the policy has no credibility ^[7]. Labor treasurer Wayne Swan describes this as "silly political games" while Green's Leader Bob Brown likened the lack of targets to saying "we'll tell you after the election", in reference to the upcoming Australian election. ^[8]

Opposition Response

The Labor Party have agreed with the plan but under their system, they would have Carbon Trading in place by 2010.^[9]

Notes