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Introduction
Emission trading scheme (ETS) is an approach that is market-based used to control pollution. It can provide incentives economically to attain pollutant emission reductions. There exist two schemes of ETS; ‘trade and cap’ and ‘the base-line and credit’.
Emission Trading Scheme in Australia
Discussions and policies of Australian have preferred a “cap and trade” scheme for solutions. According to the research paper by Leslie Nielson (2008), ‘cap and trade’ scheme is a combined cap or limit emissions coming from particular areas. Cap and trade is established by the pertinent government using a definite emissions trading scheme regulator. In 2007 late, Kyoto protocol was ratified by Kevin Rudd the former Prime Minister. After which the government involved in discussions concerning the taking effect agreement, after the commitment period of the first Kyoto protocol. The protocol enabled the international trade in permits and credits for emissions.
The scheme’s objective is to commit Australia comply with its duties encrypt in Kyoto Protocol for the reduction of the carbon dioxide equivalent emissions. Australian government report, (2008), the government was committed to the introduction of ‘cap and trade’ ETS in Australia by the year 2010. The limits were to be set by the government on nation’s emission of Green house gasses. Referring to the main tests for the Australian ETS of March 2008, there has to be consistency between caps in Emission Trading Scheme and reduction of national emissions by 25% to 40% cut at least, having 1990 as a bench mark by the year 2020. Over time, these limits will gradually be lowered with Australian a vision of 60% of the year 2000 emission reduction by the year 2050, as quoted from the government of Australia.
Australian Institute of Charted Accountants, 2008, shows that cap and trade scheme encompasses setting of overall cap on the capacity of emissions of the scheme participants. The permits of emission represent one tone of CO2 emotions, which scheme participants are allocated. Participants in positions of emitting less than what has been allocated to them by the permits trade their excess permits with those emitting more than their permits. Determination of permit price is relative to supply of and demand available for the permits. The Australian research show that coal burning, community car usage and industrial emission discharge, are the main emitters of carbon dioxide in Australia.
The Comparison of Kyoto Protocol in Australia and Other Countries
The AAUs under the protocol are allocated to the countries. AAUs are assigned to the equivalent CO2-e greenhouse gasses emission tonnage. Every country is permitted to emit according to its Kyoto commitments between the periods of 2008 to 2012. Australia has AAUs that is equivalent to 108% of 1990emissins level. Furthermore, Kyoto protocol countries hav...
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