November 10, 2011

Australia Announces First Carbon Legislation

Filed under: Australasia, climate — inece @ 1:50 am

On November 8, 2011, Australia’s parliament passed the country’s first carbon legislation, known as Clean Energy Bill 2011.  The new law establishes a tax on carbon emissions at a fixed level for a three-year period beginning in July, 2012, after which the carbon tax will be transformed into an emissions trading scheme.  Initially, only about 500 of the country’s largest emitters will be covered by the new regulation, but this will gradually expand to cover broader segments of the economy.

Under the new legislation, covered entities will be issued a limited number of Australian Carbon Credit Units (ACCUs) and must surrender a certain number of units for each tonne of emissions for which they are liable or make payment to cover the shortage.  Covered entities may purchase additional units from the government, but may only satisfy up to 5% of their total emissions obligations by surrendering ACCUs.

Transition to an emissions trading system

Following the initial three-year period, the carbon regime will transition into an emissions trading system.  During the first three years of the trading scheme, there will be a transitional price ceiling and price floor. The intent is that these be set at a level significantly higher than the expected price for the price ceiling and lower than the expected price for the price floor.

Linkage to international trading markets

The new regulation anticipates that liable entities will eventually be able to use both eligible ACCUs and eligible international units to meet their liabilities to provide emitter with additional flexibility under the mechanism. Covered entities may exceed the emission cap if they offset the excess emissions with eligible ACCUs or eligible international units. The use of international units will be subject to qualitative and quantitative restrictions in order to ensure the environmental integrity and ongoing credibility of the emission trading system.

Official Australian carbon legislation site

link to: http://www.climatechange.gov.au/en/government/submissions/clean-energy-legislative-package.aspx

Advertisements

Leave a Comment »

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Create a free website or blog at WordPress.com.