Greg Combet MP, the Australian Minister for Climate Change and Energy Efficiency, and Connie Hedegaard, the European Commissioner for Climate Action, have announced that Australia and Europe will be linking their emissions trading systems.
The plan is for a full two-way link between the two cap and trade systems to start no later than 1 July 2018. It means that businesses will be allowed to use carbon units from the Australian emissions trading scheme or the European Union Emissions Trading System (EU ETS) for compliance under either system.
Connie Hedegaard said “The European Union is the first regional emissions trading system and spans the largest part of the European continent. We now look forward to the first full inter-continental linking of emission trading systems”.
To make it work the Australian Government needs to make a couple of changes to its legislation, so an interim link will be established whereby Australian businesses will be able to use EU allowances to help meet liabilities under the Australian emissions trading scheme from 1 July 2015. There’s more detail in the press announcement.
Review: Only another five continents (at most, depending on what you count) to go before we have something like a global emissions reduction mechanism in place for business. This sort of international agreement will certainly help to put pressure on other nations/regions to implement or take part in emissions reduction schemes. Let’s hope it becomes a reality, although with the resistance to carbon legislation in Australian it’s by no means certain.
Any eventual agreement would also give a boost to carbon management and trading software solutions, both through greater awareness of the available solutions and from the additional functionality needed to manage, report and trade carbon between the two continents.