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Carbon Trading – Steps Backward And Forward …

  • March 1st, 2011
  • Posted by EUEditor

eu-oil-refinery.jpgAustralia is to have another try at setting up a carbon trading scheme, but the announcement last week (24.2.11) has provoked opposition as well as good public backing.

The European trading system, with flaws and problems of its own, looks to remain in lonely leadership for some time to come.


eu-industry-scape.jpgThe plan announced by the Prime Minister, Julia Gillard, is to start in July with a carbon tax on industry pollution, expected to include the large-scale mining enterprises and coal-fired power stations, transport and manufacturing.

It will be in the form of a fixed price per tonne on carbon emissions, with exemptions and credits available to agriculture.

With ownership and prices of credits bedded down after some three to five years, the system would become an emissions trading scheme (ETS), something like the carbon market developing now in the European Union.

While the Australian government has obtained support from  the Green Party and some independents, to secure passage of the change through parliament, the country’s conservative Opposition  parties have decided against it.

By the start of the week the Opposition Leader, Tony Abbot, had undertaken to repeal the carbon tax law if he is elected to office, the year after next, if not earlier.

He says the tax would cause higher prices for consumers, and holds onto doubts about climate change and any need for a control system like an ETS.


eu-old_factory.jpgThe European Union has no such hesitations over running a system that puts a price on pollution, via paid-for emissions of carbon; pushing towards its goal of a “20/20” answer to climate change – a 20% drop in output of global warming gases by 2020.

It does have continuing problems with running the scheme, even from the earliest days, when prices dropped to ridiculously low levels – the product of national governments giving excessive free allocations to their own industries.

Rectified, the scheme still had to be worked on.

It was suspended  on  19.1.11 in  all EU member countries,  because of criminal activity, credits being diverted in an intrusion that the European Commission is referring to as “cyber theft.”

Some parts of the system have been allowed to resume trading since then, on assurances they had improved their control mechanisms.

The European Commissioner for Climate Action, Connie Hedegaard, said (23.2.11) member governments were collaborating on joint new security arrangements.

“The Commission has identified a range of actions that Member States can already take in the short term to further improve security, for example by regularly reviewing security plans, by reinforcing registry account policies and identity checks, by training registry users etc”, she said.

Positive results have been marked-in, along the way.

A report from the European Commission last June showed that  emissions of greenhouse gases from EU businesses participating in the Emissions Trading System fell 11.6 % in 2009 compared with  2008.

Ms Hedegaard said at the time that the achievement had been in step with the slowing down of production caused by the economic recession, though the EU had also shown it could run “a functioning trading system, driving emission reductions even during a recession.”

See EUaustralia Online: “Europe claims climate gains with its emissions trade”, 22.6.10; “EU drive to end petrol products …”, 27.1.11.

Further information on the European ETS:;


European Commission , Brussels, “Emissions trading: Commission outlines actions to enhance registry security and combat fraud”, IP/11/219, 23.2.11., (28.2.11).