Australia and New Zealand Strengthen Climate Change Cooperation
Australian Minister for Climate Change and Water, Senator Penny Wong, and New Zealand Minister for Climate Change Issues, Dr Nick Smith, met in Canberra today to discuss climate change and water issues.
The Ministers agreed on the importance of taking action now to address climate change.
Today’s meeting followed a meeting earlier this month between Prime Ministers Rudd and Key, who emphasised the importance of a successful Copenhagen climate change conference in December and agreed on the desirability of harmonising to the greatest extent possible the emissions reduction regimes in both countries.
Australia and New Zealand have agreed on terms of reference to explore harmonising the design of the Carbon Pollution Reduction Scheme and the New Zealand Emissions Trading Scheme.
Senator Wong said a trans-Tasman working group would report to Governments on options to harmonise the two schemes to reduce costs for industries in both countries.
“Given the large number of firms operating in both jurisdictions, investigating options to harmonise our schemes is a priority,” Senator Wong said.
“Australia is working to coordinate its efforts to help shape a global solution to climate change with other countries and today's meeting continues the strong spirit of cooperation that we have established with New Zealand through the Australia-New Zealand Bilateral Climate Change Partnership.
“This is one way that Australia and New Zealand can continue to work closely together to build a comprehensive post-2012 global agreement to reduce greenhouse gas emissions.”
Dr Smith said: “We know that failure to act on climate change is not an option. This is a very positive step towards closer cooperation between our countries’ schemes to reduce carbon pollution.
“We’ll need to look closely at all the costs and benefits to both economies from harmonising scheme design, including adopting a single carbon pollution reduction scheme. Any harmonisation of our respective schemes would have to be beneficial to both countries. Close trans-Tasman collaboration will be important in getting the best outcome for both countries.”
The terms of reference are attached below.
Terms of Reference
Trans-Tasman Officials Group on Harmonisation of Carbon Pollution Reduction Schemes
Context
Taking into account:
* The statement of their two Prime Ministers on the “desirability of harmonising to the greatest extent possible the emissions reduction regimes in both countries”;
* The vital role of the Single Economic Market initiative in strengthening the two economies;
* The potential benefits for firms on both sides of the Tasman, including the reduction of transaction costs;
* The respective sovereignty of the New Zealand and Australian governments, and the differences between their two economies;
* The existing framework of international trading offered through the Kyoto Protocol flexibility mechanisms;
* The potential post-2012 framework of international trading and existing and developing international carbon markets;
* Existing work already undertaken to review scheme compatibility;
The New Zealand and Australian governments will work together to consider the costs and benefits of options for further harmonisation between the Australian Carbon Pollution Reduction Scheme and New Zealand Emissions Trading Scheme.
Issues for Consideration
Specifically, officials will consider:
1. Options for the level of harmonisation - including:
* Voluntary adoption of key design elements, but without mutual recognition of each other’s domestic units.
* Mutual recognition of each other’s domestic units, which would allow trading between the two schemes.
* Full harmonisation, where the two schemes would effectively become one.
It is possible for the two schemes to be more closely harmonised in some areas of design than others.
2. Priority Areas for harmonisation – specifically, areas where further harmonisation is likely to be particularly important for trans-Tasman competitiveness, which might include:
* Rules for the import / export of units.
* Price caps.
* Allocation methodologies, particularly for emissions intensive, trade exposed sectors.
* Administrative arrangements, including monitoring, reporting and verification
* Sectoral coverage and point of obligation.
3. Practical issues – including the possible timing for any harmonisation to come into force and practical steps needed in each country to enact it.
Membership
The working group is to be convened under auspices of a Trans-Tasman Officials Group and jointly chaired by the Australian Department of Climate Change and New Zealand Department of the Prime Minister and Cabinet. The work is primarily expected to be undertaken by officials from the Department of Climate Change and the New Zealand Ministry for the Environment in conjunction with other departments where relevant.