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CANBERRA/SYDNEY (Reuters) - Australia and the European Union have agreed to start talks to link carbon-emissions trading schemes, as global efforts to combat climate change struggle to make headway.
The Australian government unveiled plans two months ago to impose a tax on carbon emissions from July 2012, before moving to a carbon trading system from mid-2015.
"Australia's decision to put a price on carbon emissions is, in our view, an important step, both environmentally and economically," European Commission President Jose Manuel Barroso said on Monday after talks with Australian Prime Minister Julia Gillard in Canberra.
"It is in our view and the European experience, the most cost-efficient way to reduce emissions and also create green business opportunities. We will now continue our joint work for a global climate regime and also on a bilateral basis we will see what we can do together," Barroso said.
Europe's emissions trading scheme, by far the world's largest carbon market, was launched in 2005 and caps the emissions of the bloc's heavy industry, forcing factories and utilities to buy carbon permits to cover their emission output.
Gillard's minority government is fighting to win public support for its carbon-reduction scheme, with opinion polls showing it would be booted from power if elections were held now. The next election is due in late 2013.
Barroso, however, praised Gillard's controversial plans and said it was important to enlarge the EU carbon market, warning that in the current difficult economic climate there was not enough attention on greenhouse gas emissions.
"I cannot at this stage make a kind of forecast of when we will have a global market," he added.
Gillard said the EU and Australia would start talks to look at linking the two systems at an appropriate time in the future.
"Given our mutual interest in developing carbon markets to drive efficiencies, the president and I have agreed today to establish senior officials' talks to discuss economy-to-economy measures we can jointly undertake to link our emissions trading schemes," she told a joint news conference.
In Sydney, visiting EU Climate Action Commissioner Connie Hedegaard told reporters that making progress on U.N. climate-change talks faced challenges.
Hopes have faded for a new global climate pact to replace the Kyoto Protocol, which expires at the end of 2012, after U.S. President Barack Obama and other leaders could not agree in Copenhagen in 2009 on a new deal for limiting global warming.
Leaders of 193 countries are set to meet for the next annual U.N. climate summit in November in Durban, where talks could stall again if rich and poor nations renew squabbling over how to share emission cuts and whether to extend the existing protocol.
Hedegaard said that the European Union could be open to extending the existing Kyoto Protocol beyond 2012 but needed commitments from other key emitters.
"We are willing to sort of keep that possibility open but we need other countries -- United States, emerging economies, others -- to say when ... are they going to commit in a more binding form," Hedegaard told a breakfast briefing.
"What we can see, however, (is) that it's not very likely that the United States, that China, that others are actually adding anything this side of Durban to their different targets," Hedegaard added.
The world's biggest emitters, the United States and China, have never formally signed up to mandatory emissions caps and the previous head of the U.N. Framework Convention on Climate Change stepped down after 2009 talks collapsed.
Editing by Mark Bendeich