nz watching australia

Australian move to design carbon-trading system worth watching
by Iain Gillies
Saturday, 10 February, 2007

Sounds like a good idea . . . New Zealand will watch with interest as Australia designs a carbon trading system to see if it is possible to set up a transtasman market

Climate Change Minister David Parker seems keen on it. And the way the climate is battering our world these days, it makes sense to look at every possible way of finding a plus in a massive array of negatives.

Australian Prime Minister John Howard’s taskforce inquiry into the impact of a global emissions trading system has recommended against a carbon tax on industries.

Instead, the taskforce says emissions trading, whereby an industry might have to offset its emissions through selling credits, is a better tool for the job.

The New Zealand Government wanted to implement a carbon tax, but had to pull the plug due to a lack of political support.

The Government is now considering wider climate change policies including emissions trading, as is Australia, in an attempt to reduce greenhouse gases.

It makes sense to look at each other’s proposals.

Australia has not signed up to the Kyoto Protocol which includes the possibility of international carbon trading, but Mr Parker said that did not rule out the possibility of a scheme based solely on Australia.

It was possible to run emission trading schemes that were not linked to any other international trading, but it was likely to be more expensive for the host country.

If Australia has a scheme that looks only at Australian emission reduction opportunities, that might be more expensive than a Kyoto-type scheme.

Decisions on a transtasman scheme have yet to be taken and there are pluses and minuses associated with creating one.

An open carbon market would discover the lowest cost ways of reducing emissions.

A tradable permit market creates an explicit carbon price signal which allows business greater certainty in taking long- term investment decisions and allows for the development of financial instruments to manage risk. We can’t just sit around. We’re all in this mess together!

Gisborne Herald Tribune.nz