Aug 23, 2012 - 1:00am
On the back of the Coalition’s recent in-principle support for a second Kyoto target and in advance of next week’s next UNFCCC meeting in Bangkok, The Climate Institute has released a briefing paper on whether Australia not taking on a new Kyoto target will impact Australian businesses liable under the domestic carbon laws.
Based on legal analysis and consultations with international experts it concludes that if Australia does not take on a new Kyoto target there is a risk that Australian companies will not be able to directly access emission units generated under the UN’s international trading mechanisms.
For business this risks one or more of the following:
- Greater levels of uncertainty as to when, how and for how much they could access international units as protracted negotiations around the eligibility of countries to access markets continue.
- Direct access to emission units generated under the UN’s international trading mechanisms is not possible. This would substantially increase carbon prices in Australia.
Lack of access to Kyoto mechanisms would also impact on Australia’s ability to generate up to $770 million in revenue from the sale of excess emission units. These units are generated from over-achieving our first Kyoto commitment.
Potentially, it would also undermine the ability of the Coalition’s policy to support investment carbon farming and other emission reduction activities by limiting the sale of emission units to other countries.