The Government's delayed and much maligned emissions trading
scheme is firmly back on the agenda after a joint announcement with
the Australian Greens earlier today.
In what it billed an "essential economic reform", the
Government has proposed a two-stage mechanism that will impose an
initial fixed price on carbon from 1 July 2012, before
transitioning towards an emissions trading scheme within three to
five years. The proposal will impact in particular on large
emitters of greenhouse gases, such as mining, petroleum, energy and
transportation companies. It will also likely have flow-on effects
throughout the entire economy.
The proposal is the culmination of four meetings held by the
Multi-Party Climate Change Committee since September 2010,
comprising members of the Government, Greens and independents Tony
Windsor and Rob Oakeshott. The group has released a high-level
proposal for public comment, including a set of principles to guide
development of a carbon price mechanism.
The key aspects of the proposal are as follows:
A fixed price on carbon will commence as early as 1 July 2012
and last for three to five years.
At the end of the fixed price period, the scheme will revert to
a flexible price emissions trading scheme.
The Government will examine the international environment
before moving towards an emissions trading scheme, and may defer
the transition based on the state of the international carbon
market, progress in meeting international emissions targets, and
potential impacts on the Australian economy.
The mechanism will cover the following six greenhouse gases
identified under the Kyoto Protocol: carbon dioxide; methane;
nitrous oxide; hydrofluorocarbons; perfluorocarbons; and sulphur
Emissions from the following sources may be covered: the
stationary energy sector; the transport sector; the industrial
processes sector; fugitive emissions (other than from
decommissioned coal mines); and emissions from no-legacy
Agricultural emissions will be excluded.
Emitters may use international emissions units to assist with
compliance, but only once a flexible carbon price has been
We will continue to distribute further information as more
details are announced.
This legal update is an overview of existing eligible project activities and new project types proposed to be developed.
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