Published by Australian Academy of Science
Carbon currency – the credits and debits of carbon emissions trading Box 2 | Australia's policy response

Australia began addressing the enhanced greenhouse effect and its consequences in a formal way through the National Greenhouse Response Strategy, which was endorsed in 1992.

The National Greenhouse Response Strategy was replaced in late 1996 by the National Greenhouse Strategy. It is the primary mechanism through which our international commitments will be met.

Under this strategy, a number of programs have been launched or continued. For example, the Greenhouse Challenge Plus, launched in March 2005, is a cooperative effort between Australian industry and the Commonwealth Government to reduce greenhouse emissions through voluntary industry action. Around 780 Australian companies are part of the program. Another scheme allows carbon 'pooling' so that growers of small forests can group together to participate in abatement programs.

Australia signed the Kyoto Protocol in 1998, but the agreement was not ratified until December 2007.

In 2004 and 2005, the National Greenhouse Gas Inventory – the annual statistical report on greenhouse gas emissions – stated that Australia had achieved 101 per cent increase in emissions and is on course to meet the target emissions. While this is an increase in emissions, if business had continued 'as usual' the emissions would be 125 per cent of 1990 levels by 2008-2012. The difference between what has been achieved and what would have occurred without change in policy is equivalent to removing every car in Australia from the road.

The response of the New South Wales and Australian Capital Territory governments

About half of Australia's carbon emissions come from coal-fired electricity generating stations. Unlike many countries, we do not have nuclear power stations or large hydro schemes to produce electricity. In Australia, NSW and the ACT are the only states to have mandatory Greenhouse Gas Abatement Schemes. The NSW scheme was introduced in January 2003 and the ACT scheme in January 2005. Both schemes are interlinked and involve cooperation between the states. Electricity retailers must now meet mandatory targets for reducing the emission of greenhouse gases from the production of the electricity they supply or use.

The NSW and ACT targets for emissions are 7.27 and 7.97 tonnes of carbon dioxide equivalent per capita by 2007. This target is 5 per cent below the level determined in the Kyoto Protocol baseline year of 1990. The target levels will be maintained until at least 2012. If participants fail to meet targets, they will pay a penalty per tonne of emissions above their targets.

Abatement certificates are issued by accredited organisations for low-emission generation of electricity, reduced consumption of electricity and capture of carbon from the atmosphere by forests. Each certificate is equivalent to 1 tonne of CO₂ equivalent associated with the consumption of electricity.

Related sites

• Kyoto Protocol (Australian Greenhouse Office)

• About greenhouse (Cooperative Research Centre for Greenhouse Accounting)

• Summary of the NSW Greenhouse Gas Reduction Scheme (NSW Government)

• ACT Greenhouse Gas Abatement Scheme (ACT Government)

Other boxes

Box 1. International deliberations