Australia to link with EU carbon scheme from 2015

Australia announced Tuesday it will link its hard-fought carbon pricing scheme, aimed at combating climate change, with the European Union's from mid-2015.

Australia introduced the first stage of its plans to put a price on carbon dioxide pollution in July with a so-called 'carbon tax', which charges big polluters Aus$23 (US$23.81) per tonne for their emissions of the gas.

The government has always said it would move to an emissions trading scheme after three years with a floating price set by the market. Climate Change Minister Greg Combet said this would be linked to the EU's scheme from 2015.

'This means that from July 1, 2015, Australia's carbon price will effectively be the same as that that operates in our second largest trading bloc,' he told reporters.

A full two-way link in which there would be mutual recognition of carbon units between the two cap and trade systems would begin no later than July 1, 2018, he added.

The minister said a previous commitment to set a floor price of Aus$15 per tonne for the first three years to avoid price shocks would be scrapped.

'We now look forward to the first full inter-continental linking of emission trading systems,' European Commissioner for Climate Action, Connie Hedegaard, said in a joint statement with Combet.

Combet said he was confident of Australian government modelling, which predicts a Aus$29 a tonne carbon price in 2015-16. The current EU price is below Aus$10.

The issue of a carbon tax has been hotly debated in Australia, among the world's worst per capita polluters due to its reliance on coal-fired power and mining exports.

Prime Minister Julia Gillard's popularity has sunk since she announced plans for the carbon tax in early 2011 -- after pledging before her 2010 election that it would not be introduced by a government she led.

The policy backflip prompted protests around the country against the carbon tax and conservative opposition leader Tony Abbott, who opinion polls suggest will win the 2013 election, has vowed to abolish it.



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