From July 2015,
Australia’s carbon pricing mechanism will be linked to carbon
markets around the world according to a press statement from the
Australian Department of Resources, Energy and Tourism.

This will allow reductions in carbon pollution to be pursued
globally at the lowest cost. Carbon pollution is not confined to
national borders - it affects the whole planet.

International linking of carbon markets will allow businesses
that release carbon in one country to be matched up with businesses
in other countries that are able to reduce their carbon pollution
at lower costs.

International linking encourages action to reduce carbon
pollution around the world, and plays an important role in helping
developing countries adopt clean technologies.

Australian businesses will be able to buy international permits
from credible international carbon markets or emissions trading
schemes in other countries. They will be allowed to use these
permits to meet some of their local obligations.

When an Australian business buys an international permit, it
means that a tonne of pollution cannot be released overseas.
Farmers will be able to sell their Carbon Farming Initiative
credits to international markets.

Safeguards will be in place to ensure international permits are
credible and do not undermine the environmental integrity of
Australia’s pollution reduction efforts.

Until 2020, businesses will have to meet at least half of their
annual obligations each year by buying Australian carbon permits or
Carbon Farming Initiative credits.

It will be more efficient and less costly to reduce Australia’s
carbon pollution by a mixture of domestic reductions and
international permit purchases compared with relying on domestic
action alone.

International linking allows Australian businesses to pursue
credible, cheaper carbon pollution reduction opportunities wherever
they are available.

The price of international permits will act as an additional
safety valve on carbon prices in Australia, says the
Department.

If reducing carbon pollution in Australia is more expensive than
reducing carbon pollution in another country, Australian firms will
be able to purchase an international permit. With international
linking, the carbon price in Australia will be set by international
supply and demand for permits.

For more information, see the href=”http://www.cleanenergyfuture.gov.au/international-linking/”
target=”_blank”>International Linking fact sheet.