Politica

Australia’s Carbon Pricing Mechanism – Why Emissions Trading?
James White Department of Climate Change and Energy Efficiency

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Why emissions trading?

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Why emissions trading?• Australia is a small, open economy with a strong history of marketbased economic reform
– Market -based approach preferred over regulatory responses

• High per capita emissions meanleast-cost abatement is key in Australia

• Allows international linking which lowers costs
• Cap gives certainty that a national target will be met • Provides business certainty throughclear, long term policy settings
– More scope for private sector risk management strategies

A brief history
• More than 10 years ago - First discussion papers on emissions tradingpublished by the Australian Government

• 2003 – State-based Greenhouse Gas Reduction Scheme commences
• 2006 – State governments’ report supports a national approach to emissions trading• 2007 - Australian Government commits to national emissions trading
• 2009 – Australian Parliament fails to pass Carbon Pollution Reduction Scheme • 2011 – Australian Parliament legislatesClean Energy Act

The path from 2007 to legislation in 2011
• Report of the Task Group on Emissions Trading recommends cap and trade scheme be adopted as Government policy 2008 - GarnautReview, Green Paper and White Paper on the Carbon Pollution Reduction Scheme (CPRS) 2009 – CPRS Legislation rejected by Parliament twice 2010 – Multi-Party Climate Change Committee ofParliamentarians formed 2011 – Minority Government passes Clean Energy Act

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Questions?
Further information about climate change and renewable energy is available online at: www.climatechange.gov.au  www.cleanenergyfuture.gov.au  www.livinggreener.gov.au.
James White Climate Strategies and Markets Division James.White@climatechange.gov.au

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