Australia Plans to Start Carbon Market in 2010

Sydney, 17 July 2008. The Australian government has announced plans to create its own Carbon Market, creation a structure similar to that started by the European union several years ago.

Sydney, 17 July 2008. The Australian government has announced plans to create its own Carbon Market, creation a structure similar to that started by the European union several years ago.

The carbon emissions trading scheme will be officially launched in 2010. This follows the election last year of the Labour government led by Kevin Rudd, who had promised decisive action on pollution and climate change as part of a major change from the skeptical policies of the preceding conservative government.

Australia is one of the worst carbon-polluters in the world, on a per-capita basis. Its vast size requires it to transport electricity on scale unlike most other countries, and its mining and agricultural sectors are also large energy consumers. The Australian government sees the introduction of this market as the largest reform of the Australian economy in twenty years. It is targeting a 5% reduction in emissions within the next five years.

The scheme will follow the ‘cap and trade’ structure implemented by the European Union Greenhouse Gas Emissions Trading Scheme (EU ETS), now the largest of its kind in the world.

Analysts at Point Carbon have analyzed the effective value of the scheme based on the EU ETS experience, and say that it could grow to an $11 billion market by 2013.

A voluntary carbon trading market was opened in Australia in July 2007 by the Australian Climate Exchange (ACX). It is expected to get a boost as companies prepare for the official exchange opening.

While the worldwide carbon market is expected to grow rapidly in the next few years, analysts are divided as to whether it will help meet its primary goal of reducing greenhouse gas emissions.

Carmen Sanderson, EconomyWatch.com