{"id":465,"date":"2011-11-09T11:53:53","date_gmt":"2011-11-09T16:53:53","guid":{"rendered":"http:\/\/blogs.edf.org\/markets\/?p=465"},"modified":"2026-04-02T14:24:45","modified_gmt":"2026-04-02T19:24:45","slug":"australias-landmark-legislation-will-put-price-on-carbon-pollution-create-worlds-second-largest-carbon-price-system","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/markets\/2011\/11\/09\/australias-landmark-legislation-will-put-price-on-carbon-pollution-create-worlds-second-largest-carbon-price-system\/","title":{"rendered":"Australia’s landmark legislation will put price on carbon pollution, create world\u2019s second-largest carbon-price system"},"content":{"rendered":"

By Jennifer Andreassen<\/a>, originally posted on our Climate Talks<\/a> blog.<\/em><\/p>\n

As expected, Australia\u2019s upper house of Parliament voted yesterday to adopt a carbon price<\/a>, which will compel Australia\u2019s largest polluters, beginning July 1, 2012, to pay for their carbon pollution.<\/p>\n

\"\"<\/a>
Australia will have the largest carbon-price system in the world outside Europe’s, after its upper house approved the Clean Energy Future package of bills Nov. 8. The package of bills aims to cut emissions from coal-dependent Australia 80% by 2050 from 2000 levels.<\/figcaption><\/figure>\n

The legislation\u2019s passage will give Australia, which has the highest per capita emissions of any developed country in the world and uses even more coal than the United States, the largest carbon-price system in the world outside of the European Union<\/strong>. (That is, the largest outside the EU until California\u2019s program<\/a> takes effect in January 2013; California last month approved the largest, first-ever economy-wide carbon market in North America<\/span><\/a>, which could eventually link to other sub-national, national and regional markets around the world.)<\/p>\n

EDF applauds Australia on its leadership on the vitally important problem of climate change. <\/strong>This vote is another indication that more and more countries around the world \u2013 with the U.S. being a notable exception \u2013 are taking climate change seriously. The legislation also backs Australia\u2019s international commitment to reduce emissions by between 5 and 25 per cent by 2020 from 2000 levels.<\/span><\/p>\n

The Clean Energy Future Package<\/strong><\/h3>\n

The Clean Energy Future package<\/span><\/a> is made up of 18 bills that will assign a price to carbon starting July 1, 2012 and cut Australia\u2019s emissions 5% below 2000 levels by 2020 (though the target can be strengthened based on science or international action), and 80% below 2000 levels by 2050.<\/p>\n

Australia\u2019s 400-500 largest emitters will be covered by the carbon price, which will take the form of a fixed price (starting at A$23 per metric ton) for the first three years, and shift to a carbon market emissions trading system in 2015.<\/p>\n

As we mentioned when Australia\u2019s lower house passed the clean energy legislation<\/span><\/a> on October 11<\/span>, the Clean Energy Future package will shift Australia\u2019s energy towards cleaner and renewable sources by:<\/p>\n

    \n
  1. Placing a price on carbon<\/strong>.<\/li>\n
  2. Creating a market-based system with plans to link it<\/strong> with \u2018credible international carbon markets or emissions trading schemes in other countries\u2019 \u2013 like New Zealand and Europe \u2013 after 2015.<\/li>\n
  3. Giving a big boost to renewable energy research and development and deployment<\/strong> through a new $10 billion financing vehicle, the \u201cClean Energy Finance Corporation.\u201d<\/li>\n<\/ol>\n

    (The Southern Cross Climate Coalition has some more details on the legislation in its analysis<\/span><\/a>, as does <\/span>Natural Resources Defense Council\u2019s Jake Schmidt in his post Congrats Australia! Law passed which will require mandatory carbon pollution reductions for major polluters<\/span><\/a>.<\/span>)<\/p>\n

    Climate groups in Australia welcomed the passage of the laws<\/span><\/a>, as did:<\/p>\n

    Australian Prime Minister Julia Gillard, who told reporters<\/span><\/a>:<\/p>\n

    Today we have made history. … This is about what’s right for the nation’s future.<\/p><\/blockquote>\n

    Deutsche Bank Australia carbon analyst Tim Jordan, who said<\/span><\/a>:<\/p>\n

    This is a very positive step for the global effort on climate change. It shows that the world’s most emissions-intensive advanced economy is prepared to use a market mechanism to cut carbon emissions in a low-cost way.<\/p><\/blockquote>\n

    CEO of The Climate Institute John Connor, who said<\/a>:<\/p>\n

    This is a vital cog in Australia’s pollution reduction machinery with the potential to help cut around 1 billion tonnes of carbon pollution from the atmosphere between next year and 2020.<\/p>\n

    This vote means Australia now brings greater credibility going into international climate negotiations starting later this month in South Africa. It also puts wind in the sails of other jurisdictions about to introduce, or considering, emissions trading schemes which similarly price and limit carbon pollution.<\/p><\/blockquote>\n

    The G20 Cannes Action Plan for Growth and Jobs<\/span><\/a> even highlights the Australian legislation as an example of how members will \u201cenhance competition and reduce distortions\u201d in its plan to create \u201csustained, broad-based reforms to boost confidence, raise global output and create jobs.\u201d<\/p>\n

    What\u2019s next for Australia<\/strong><\/h3>\n

    Now, the Government moves into implementation mode, which means it will take to:<\/p>\n