Euro vision: Australia’s new carbon regime explained

Australia has hitched itself to Europe’s climate change wagon today in a move which will have far-reaching — and uncertain — consequences for the domestic carbon scheme.

The decision to link Australia’s carbon scheme with Europe’s (and dump the floor price on permits) is a game-changer. Until today we were the southern hemisphere’s mouse that roared on climate change. Now we’ll effectively be part of a large, entrenched and relatively stable carbon price mechanism, which covers half a billion people.

Today’s move probably means the cost for Australia to reduce emissions will come down — in the medium term at least (say three to six years). But actually, costs could go up. The move probably makes it harder for the Coalition to repeal the carbon tax if it wins the federal election.

Read more of the article by Cathy Alexander here