Emissions Trading
Emissions trading is one of the many measures that the Greens have long been campaigning for to put Australia on track to build a new, post-carbon economy. But, in order to be effective, it must be carefully designed to avoid rorting of the system by polluters, and must be one of a package of complementary measures rather than being seen as a 'silver bullet'.
Emissions trading can be an effective tool to achieve two important aspects of the climate policy framework: putting a price and a cap on carbon emissions. Where a carbon tax is technically simpler (it sets the price and lets the individual players decide how much to reduce emissions), emissions trading has the benefit of providing environmental certainty (it sets a cap on total allowed pollution, establishes the rules, and lets the market determine the price of polluting).
An emissions trading scheme (ETS) must be designed to reduce emissions at least cost and in the most equitable way. While the second and third points are vital to good design, emissions trading is about reducing emissions - if it does not achieve that goal, then it is worthless. The ETS must be environmentally credible first and foremost, and its design and its complementary measures must ensure equity and least cost emissions reductions.
The key to ensuring an ETS is environmentally credible is to make the scheme's cap in line with a credible national target to reduce emissions. Once the cap is set, the design of the scheme must back up emissions reduction efforts rather than undermine them.
The Greens believe that a bad emissions trading scheme can easily be counterproductive, reducing our ability to cut greenhouse emissions fast and effectively. The Greens will not support such an emissions trading scheme.
