Australia is to start work on linking its carbon price to emissions trading schemes in Europe and New Zealand, Climate Change Minister Greg Combet said last night as the world’s big emitters squared up for the final week of the Durban climate conference.
As senior climate negotiators and ministers arrived in the South African city for the important second week of talks, Mr Combet said Australian officials would work with European and New Zealand counterparts ”to promote deep, liquid and integrated carbon markets”.
His remarks came as the European Union and China each put forward proposals in Durban for extending limits on greenhouse gases, though in both cases with conditions that mean a deal remains unlikely.
Australia needs to link to international carbon markets to avoid the Gillard government’s pricing scheme soaring in cost. Mr Combet said markets that enabled Australian emitters to buy and sell permits with companies abroad were the best way to keep the price down because markets naturally find the cheapest way to cut emissions.
”Expanding international carbon markets is good for the environment and good for economic growth,” he said. ”It allows global emissions to be reduced in the most cost-effective and efficient way.”
The EU’s emissions trading scheme, operating since 2005, is by far the world’s largest, covering about 40 per cent of the 27-member bloc’s greenhouse gas emissions.
Coalition spokesman for climate action Greg Hunt said: ”Both of these steps have been reannounced in various ways at various times. None is a substitute for the global agreement on which the government’s modelling is based and which will have to be redone after Durban.”
Mr Combet will meet overnight tonight New Zealand’s Minister for International Climate Change Negotiations, Tim Groser, as well as his American and Japanese counterparts.
Observers said progress was being made on issues such as the Green Climate Fund, under which wealthy nations would give poorer countries $100 billion a year to move to cleaner energy and adapt to unavoidable climate change.
An EU compromise proposal put forward on Sunday would preserve the Kyoto Protocol with a legally binding parallel treaty to force all countries to cut emissions, but at different speeds and timescales.
Europe and the South African chair of the talks are thought to have persuaded the 42-strong Alliance of Small Island States coalition and the 48 least developed countries to back the EU. ”China is sending signals of flexibility, Indonesia, South Africa, and Brazil are sympathetic but India is still saying the current treaty is a red line,” said an EU source.
China is leading a group of developing nations, including Brazil and India, asking industrial nations to sign up to their second set of commitments under Kyoto. The developing countries want to avoid binding targets of their own before 2020.
