Carbon Emissions Exchange

The Kyoto Protocol and subsequent Paris Climate Agreement  have arisen in response to mounting concerns regarding carbon and green house gas emissions around the globe, and the impact of these emissions on the worlds climate. There is general agreement in the scientific and political arenas that unless carbon and green house gas emissions are contained and reduced, the impact of climate change and global warming on the planet could be disastrous.

 

The previous Australian Federal Government had committed to the Kyoto Protocol, and had indicated its intention to implement  an carbon emissions trading scheme based on a cap and trade rational to commence 2013. The legislative framework for the ETS (Emissions Trading Scheme) was to be based around the National Greenhouse and Energy Reporting Act,  the proposed Carbon Pollution Reduction Scheme Bill, and the Carbon Credits (Carbon Farming Initative ) Bill 2011.

Policy was  formulated, around  the Carbon Tax Bills which were passed by the House of Representatives on the 12 October 2011.The stated objective of the new legislation was to help Australia meet it obligations under the United Nations Convention  on Climate Change and the Kyoto protocol, and to move the Australian economy to a more sustainable basis.The legislation was expected to create significant challanges for industry generally and the major emitters in particular.  The trading of carbon offsets was to provide important breathing space as industry and commerce work towards reducing their carbon footprint.

The 2013 election of the Coalition Federal Government significantly changed the state of play in dealing with CO2 emissions in Australia with the current Coalition Government adopting a very different approach to manageing this issue. The Coalition Government repealed the Carbon Tax on 1st July 2014 and  adopted a Direct Action plan through the  ERF (Emissions Reduction Fund)  where the federal gvernment through the Clean Energy Regulator purchases complying  ACCU's (Australian Cardon Credit Units-emission offsets) offered by the private sector in a competitive public auction. We note the next Emission Reduction Fund Auction is scheduled for the 5-6 April 2017.  The previous Labour federal government legislative framework was structured to  encourage reductions in CO2 emissions by providing incentives to cut emissions  through imposition of a Carbon Tax. At the current time the Coalition federal government's ERF approach involves  purchasing offsets in the open market. We note the Labour opposition at this time maintains  its previous position of a national emissions trading scheme approach to the problem of Co2/greenhouse gas emissions .

 The majority of the state governments are already implementing emission reductions strategies and related legislation to deal with the emissions issue. In fact NSW established the first mandatory carbon trading scheme for its power industry in 1998, and was the first government in the world to establish and define carbon rights as a separately trade-able commodity in the same year with their  GGAS  scheme. The Greenhouse Gas Abatement Scheme aims to reduce greenhouse gas emissions associated with the production and use of electricity. GGAS has established annual statewide greenhouse reduction targets which requires electricity providers to meet mandatory benchmarks for reductions in CO2 emissions .  

Carbon Emissions Exchange is positioned to assist those organisations looking to manage this issue in the most efficient way. Notwithstanding the lack of emissions trading policy at the current time at federal government level ,we expect  the trading of carbon offsets will become an important part of a comprehensive strategy to be adopted by organisations as they deal with this issue.