FACT SHEET:

EMISSIONS TRADING IN AUSTRALIA

An emissions trading scheme will be the central instrument for limiting Australia’s greenhouse gas emissions. The Australian Government recently released a Green Paper outlining its preferred options for a Carbon Pollution Reduction Scheme (an emissions trading scheme) in Australia. The Government is conducting a consultation on its preferred model and alternatives, with the final design of the scheme to be decided by the end of the year and a planned start date in 2010.

So what is a Carbon Pollution Reduction Scheme (CPRS) and how will it work?

Humans are used to using the atmosphere as a rubbish bin. Anyone can emit greenhouse gases into the atmosphere at no immediate financial cost to themselves but we now know that there is a cost to everyone – these  emissions are causing dangerous and irreversible climate change.

We must dramatically reduce the amount of greenhouse gases we are releasing into the atmosphere to stem the tide of climate change.

An emissions trading scheme is designed to use the market to limit the amount of greenhouse gases emitted into the atmosphere. It will work by requiring companies to obtain permits to emit, and putting a cap on the number of those permits. This effectively puts a price on emissions, and is a means of incorporating the environmental, social and economic costs of these emissions into the economy.

How does emissions trading achieve emissions reductions?

The government is able to reduce greenhouse gas emissions by progressively reducing the number of permits available each year. The schedule for emissions reductions will determine how quickly and steeply this reduction occurs.

The Australian Government has committed to a long-term emissions reduction target of 60 percent (below the level emitted in 2000) by 2050. It will announce its medium-term target for 2020 at the end of 2008.

Emissions permits

	The CPRS will not require all businesses to hold permits. The Government has proposed an emissions threshold of 25 000 tonnes of CO2 equivalent emission per year, meaning that businesses emitting greenhouse gas at levels below this would not require permits.
	The direct costs to some businesses of acquiring permits will flow down the chain in the economy to other businesses and consumers.
	Emissions permits can be auctioned, allocated to companies free of charge, or a combination of the two.
	Auctioning permits creates a large pool of revenue which can be used by the Government for other policies and programs (this could include other climate change initiatives, such as assistance to households to improve their energy efficiency).
	Free allocation of permits provides a form of assistance to companies and industries significantly financially-affected by the introduction of emissions trading.
	The Government has proposed that permits for the CPRS move, over time to 100 percent auctioning, but this will be subject to the provision of assistance to strongly-affected industries.

“The Uniting Church regards climate change as a serious threat to the future and integrity of life on earth…

The Uniting Church in Australia believes that it is important for the Australian Government to set and commit to meeting serious targets for greenhouse gas emission reductions primarily through the promotion of renewable energy sources, measures to reduce energy demand and promotion of energy efficient measures.”

For the Sake of the Planet and All its People: A Uniting Church Statement on Climate Change
Resolution of the Assembly Standing Committee, November 2006

Want more information?

For more UnitingJustice work on climate change and environmental sustainability go to:

http://www.unitingjustice.org.au/index.php/issues/living-sustainably.html

You can find the Australian Government’s Carbon Pollution Reduction Scheme at:

http://www.climatechange.gov.au/emissionstrading/index.html