Emissions Trading

EMISSIONS TRADING

Introduction

As part of its National Greenhouse Strategy, the Australian Government has agreed to limit its increase in greenhouse gas emissions to only 8% above the level of the 1990 base year by the target period of 2008-2012.

Carbon Trading

In response to the growing interest in emissions trading and carbon credits, the Kyoto Climate Change Conference, held in December 1997, recognised that carbon trading should be permitted under the so called ‘flexibility mechanisms’.

Therefore the Kyoto Protocol provided scope for participating countries to issue ‘credits’ for carbon sinks and emissions trading i>‘permits’.

National Emissions Trading System (NETS)

In Australia, emissions trading has not yet be approved by the Commonwealth Government, (ie this may occur around the end of 1999), but when it is a National Emissions Trading System will be set up to register and regulate the issuing of carbon credits and tradable permits.

Under the proposed NETS, tradable permits will operate like ‘licences to emit’, and these will be able to be bought and sold by permit holders both locally as well as internationally.

Emitters of greenhouse gases will surrender permits equal to their emissions, and will need to buy additional permits to meet shortfalls. Alternatively, surplus credits which are not required by emitters can be sold by them.

For more information please contact EMET Consultants or the Australian Greenhouse Office.

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