New Matilda put the following questions to Climate Change Minister Greg Combet:
- What countries will Australian polluters be allowed to buy carbon credits from?
- Will REDD be included?
- How will Australian authorities verify that carbon reductions are real?
- How will the "big polluters" (the 500 facilities under NGER) report their overseas credits when it comes to satisfying their carbon tax obligations?
A spokesperson for the Department of Climate Change and Energy Efficiency replied in an email:
"The Government has indicated that the use of international units will not be permitted during the fixed price period but will be allowed from the commencement of the flexible price period (ie from 1 July 2015), subject to certain qualitative and quantitative restrictions. In particular, Australian business will be able to use credible international units to meet up to 50% of their compliance obligation.
The Government has determined that in the establishing legislation, international units available under the Kyoto Protocol’s flexibility mechanisms (which are already traded internationally) will be eligible for compliance purposes, subject to specific qualitative restrictions to ensure that only credible units are used. Such Kyoto units are validated and verified by United Nations Framework Convention on Climate Change (UNFCCC) processes to ensure they represent genuine abatement and these audit processes have been strengthened over time.
Decisions regarding changes to eligibility for compliance of international units will be determined in the lead up to flexible pricing in 2015 and beyond. The Climate Change Authority (‘the Authority’) will play a key role in advising on the integrity of international units, including recommending any additional units which should be accepted and any units which should be prohibited. The Authority will consider the robustness of relevant national and international validation/verification processes when making recommendations on which international units should be eligible.
The Government has already indicated that linking to other credible trading schemes, including the European Union (EU) and New Zealand (NZ) emissions trading schemes, would be in the national interest. The Government has also indicated that the types of units accepted and qualitative restrictions on use imposed by the EU and NZ schemes will be taken into account when determining what international units may be accepted for compliance under the carbon pricing mechanism. The Government has already determined that, like the EU, Australia will not accept Kyoto units derived from nuclear energy and certain industrial gas and hydro-electric projects.
In the future, the Authority will examine the case for accepting international units from other sources, potentially including units generated from reducing emissions from deforestation and forest degradation in developing countries (REDD+). The Authority would then make recommendations to the Government, which will then determine whether such units would be eligible.
The carbon price regulator will be responsible for ensuring only eligible international units, up to the allowable limit, are used for compliance by liable entities under the carbon price mechanism. The regulator will also publish the quantities of eligible domestic and international units respectively surrendered for compliance by liable parties."
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