December 5, 2011 / 6:57 AM / 8 years ago

Australia, New Zealand could link carbon trade schemes in 2015

CANBERRA (Reuters) - Australia and New Zealand said on Monday they could link their carbon trading schemes as soon as 2015, immediately after Australia’s government moved from a fixed carbon tax to the world’s second-largest market scheme to cut pollution.

After talks in Durban, South Africa, on the sidelines of global talks on a successor to the Kyoto climate pact, Australia’s Minister for Climate Change Greg Combet and his New Zealand counterpart Tim Groser said both countries were aiming to link their two schemes as soon as possible.

“Markets are the way to cut our emissions at least cost. That is why Australia is working with New Zealand to develop them domestically and internationally,” Combet and Groser said in a joint statement.

Australia’s parliament last month passed laws setting up the world’s most comprehensive carbon price scheme outside Europe, forcing 500 companies to pay a A$23 per ton carbon tax from next July, moving to a market-based trading scheme in 2015.

Close neighbor New Zealand began emissions trading in July last year, targeting first foresty, electricity, industry and transport to deliver cuts in greenhouse gas emissions of between 10 and 20 percent by 2020 on 1990 levels.

Groser and Combet said discussions between officials from both countries had already identified some areas for possible linkage, and had identified 1 July 2015 as a possible start date, once Australia moved to a flexible price mechanism.

Australia’s conservative opposition has promised to dismantle Australia’s scheme if it wins elections in 2013, although constitutional experts have warned it will be no easy task to untangle the laws and could cost billions of dollars in compensation for business.

Rapid integration with schemes in other countries could make that unwinding even more difficult.

Combet also held talks with Europe’s Commissioner for Climate Action Connie Hedegaard to look at how Australia and the EU could integrate their carbon markets.

“We look forward to working with Australia on international action to develop carbon markets and exploring the opportunities of linking Emissions Trading Schemes,” Hedegaard said.

Both Combet and Hedegaard agreed to share information on domestic climate change action to help accelerate the development of comprehensive international carbon markets.

Reporting by Rob Taylor; Editing by Lincoln Feast

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