IETA welcomes fully linking Australian and EU Emissions Trading Schemes
Full two-way link will lead to significant cost savings
For Immediate Release
Geneva, Switzerland - August 28, 2012 - IETA today welcomed the announcement by Australia and the European Commission of plans to link their greenhouse gas emissions trading programs, hailing it as a landmark in the development of global carbon markets.
“This is an impressive development – a first of its kind in having two major economies link their carbon pricing programs,” said Dirk Forrister, President and CEO of IETA. “IETA members - and economists worldwide - have advocated the potential cost-savings benefits of linking for over a decade, so we are extremely pleased with this news –even as we continue studying the details.”
The Australian Minister for Climate Change and Energy Efficiency, the Hon Greg Combet MP, and the European Commissioner for Climate Action, Ms. Connie Hedegaard today announced plans to link the Australian and EU Emissions Trading Schemes. Europe’s emissions trading program, the largest in the world, began in 2005. The first stage of Australia’s began in July 2012.
The Australian Government has decided to remove the proposed price floor originally proposed for their system, which will remove an important difficulty in linking the two systems. The Government will also reduce the percentage of Kyoto credits that participants in the Australian scheme can purchase for compliance, while allowing firms in Australia to purchase significant amounts of EU Allowances.
According to IETA’s President & CEO, Dirk Forrister: “Linking is important because it allows both systems to become stronger and more resilient. Economic studies and the experience of global markets show that linking broadens the opportunities for reducing emissions across a wider geographical horizon, and it gives businesses flexibility to invest in the lowest cost solutions across a wider geographical range. At a time when emissions trading is spreading to many developing countries, this decision reminds Governments across the world of the advantages of a global approach.”
“Obviously, there are many technical details to explore, as well as processes to be completed – in terms of the treaty process, legislation and technical matters,” Forrister continued. “IETA stands ready to assist as the process moves forward, and to help draw out the benefits of this approach for other nations and trading systems.”
IETA will continue to work closely with policymakers in Australia and the EU to help the development of an intercontinental carbon market that will deliver essential emission reductions at the least economic cost.
Contact: Jeff Swartz – International Policy Director
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IETA has been the leading voice of the business community on the subject of carbon markets since 2000. IETA's +150 member companies include some of the world's leading corporations, including global leaders in oil, electricity, cement, aluminum, chemical, paper, and other industrial sectors; as well as leading firms in the data verification and certification, brokering and trading, legal, finance, and consulting industries.
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