[Viewpoint] Trading carbon for future

Australia and the Republic of Korea share a strong national interest in finding a global solution to climate change. Australia and Korea both play an active role in international climate change negotiations. We welcome the leadership role that Korea has played in advocating green growth, including by hosting the Global Green Growth Institute. Both our countries are developing effective national policies that reduce emissions while at the same time building a prosperous and sustainable future.

By the beginning of next year, the European Union, Australia, New Zealand and California will be using emissions trading to drive low-carbon development. Like Australia, Korea has already identified emissions trading as an effective tool to reduce greenhouse gas emissions and transition from high pollution energy generation. Increasingly, carbon trading is being used to harness the power of the market to find the most efficient and least costly way of achieving emission reductions.

Australia’s carbon price will come into force on 1 July, setting a price on greenhouse gas emissions across 60 percent of the Australian economy. Essentially this rewards Australian businesses that reduce emissions by developing cleaner technologies and processes. The carbon price is the centerpiece of our strategy to reduce Australian emissions 80 percent by 2050.

Australian Treasury modeling shows that Australia’s economy will continue growing strongly with the carbon price in place. We also expect many opportunities to flow from the incentives generated by the carbon price. Like Korea, we can take steps now that will lead to economic strength in a carbon-tight future.

By 2015, the Australian carbon price will be linked to international carbon markets through emissions trading. Australia, therefore, has a strong interest in facilitating the growth of broad and liquid carbon markets. Australia is exploring options for linking to existing schemes, such as the European Union’s Emission Trading System and New Zealand’s ETS. We are also open to explore linking to other robust and credible trading systems that may develop in the next years, including Korea’s.

Korea has embarked on an ambitious green growth strategy. There are many ways Australia and Korea can work together to reduce emissions, speed up the uptake of clean technologies, increase energy security and secure economic growth. This is the recipe for continued economic growth and prosperity. As part of this transformation we both need to continue to build credible domestic policy reform to reduce emissions and to adapt to a changing climate. And we need to strengthen our opportunities to work together and as part of the overall global effort.

* The author is Australia’s minster for climate change, industry and innovation.

by Greg Combet