Australia recently announced that it will join the European Union’s carbon emissions trading scheme starting in mid-2015, a decision that most likely stemmed from the fact that they are one of the world’s worst greenhouse gas emitters per capita, mostly because of their use of coal to generate power. This decision will result in the biggest emissions trading market on the planet.
Australia’s major polluters can currently start buying European carbon permits to cover their liabilities from July 2015, but Europeans must wait to buy Australian permits until mid-2018.
An unpopular carbon tax was passed in Australia on July 1st of this year. It stated that almost 300 of its biggest polluters had to pay 23 Australian dollars, which is equal to 24 US dollars, for every metric ton of carbon dioxide, or an equivalent carbon gas, that they emit. Due to this tax, Australians feared losing their competitive edge from being charged more than other countries. However, the linking of the Australian and EU systems has calmed these concerns.
This bond will provide the possibility of reducing compliance costs to businesses with operations both in Europe and Australia, and will support the overall goal of lowering emissions and battling climate change through international collaboration.