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Moving towards APAC region ETS (May 2012)
Observers are noting that Australian efforts to internationalise carbon pricing are continuing and becoming more refined as the options crystalise.
Following on from the visit of the European Union’s Commissioner for Climate Action, Connie Hedegaard in December 2011, conversations at a Ministerial level – leave alone the constant departmental contacts – have been conducted with Indonesia, China, Japan and Korea to name a few of the more recent conversations.
As with the carbon markets focus of the discussions with the EU, the most recent conversation, between Australia’s Greg Combet and the Environment Minister of the Republic of Korea, focussed on emissions trading.
Of particular interest, is that the Korean government is considering establishing an emissions trading scheme to commence operation from 2015, exactly when the Australian carbon price will switch from a fixed price to a floating price regime.
Minister Combet was not shy about the possibilities that exist for establishing clear linkages between the two schemes, saying, “Over time, by linking emissions trading schemes in the Asia-Pacific region, we will be able to develop common carbon prices and overcome potential competitive issues with our major trading partners in the region.”
Relevantly, both Australia and the Republic of Korea are in the top 15 of the world’s emitters. Both would be pivotal to any Asia Pacific regional emissions trading scheme. Of note is that the New Zealand government has its own emissions trading scheme under review currently. With that country’s scheme shadowing the EU’s pricing, there will inevitably be interest in a regional solution that might also may make the NZ’s very illiquid market a little more like a proper market with its own features and variability’s.
Underscoring the work that is under way, senior officials of the two countries will commence formal meetings from the second half of 2012, on an agenda and program that includes, “…technical cooperation on the development of credible, broad, and integrated carbon markets; domestic climate action; renewable energy and energy efficiency policies; and multilateral climate negotiations.” according to an Australian Government media release.
There doesn’t appear to be a done deal here, but the wheels are turning towards at least regional linkages for emissions trading schemes and probably, for at least something credible and robust to be in operation by mid-2015 if that proves feasible.
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