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Australia and Europe strengthen collaboration on carbon markets

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THE HON GREG COMBET AM MP Minister for Climate Change and Energy Efficiency


European Commissioner for Climate Action


GC 334/11 5 December 2011


The Minister for Climate Change and Energy Efficiency, Greg Combet, and European Commissioner for Climate Action, Ms Connie Hedegaard, today released the Terms of Reference for the Australia-Europe Senior Officials Talks on Climate Change, to commence in 2012.

This follows European Commission President José Manuel Barroso and Australian Prime Minister Julia Gillard’s announcement in September 2011 that Australia and the European Union (EU) would establish regular Senior Officials Talks on climate change.

The Talks will focus on how Australia and the EU can work together to promote deep, liquid and integrated carbon markets. It will also examine the mechanics of linking Australia’s Carbon Pricing Mechanism with the EU’s Emissions Trading Scheme

Ms Hedegaard highlighted that the EU was the largest existing carbon market.

“We look forward to working with Australia on international action to develop carbon markets and exploring the opportunities of linking Emissions Trading Schemes,” she said.

Mr Combet said Australia and Europe recognised that a strong international carbon market was the most cost-effective way of reducing greenhouse gas emissions and creating clean energy jobs for the future.

“The EU has been a pioneer in global efforts to reduce carbon pollution, putting in place an Emissions Trading Scheme in 2005,” Mr Combet said.

“Now that Australia's carbon price is the law, the Australian Government will focus on linking our scheme to international carbon markets and other emissions trading schemes.

“Expanding international carbon markets is good for the environment and good for economic growth. It allows global emissions to be reduced in the most cost effective and efficient way.”

The Terms of Reference are attached below.

Media contact: Mark Davis 0400 295 560 or Gia Hayne 0412 060 406 (Minister Combet)

Terms of Reference: Australia-Europe Senior Officials Talks on Climate Change

1. On 5 September 2011, Australian Prime Minister Gillard and European Commission President Barroso announced the establishment of Senior Officials Talks (SOT) to exchange experience on design and implementation and cooperation on economy-to-economy measures, including the conditions which would allow for linking Australia’s Carbon Pricing Mechanism (CPM) and the European Union Emissions Trading Scheme (EU ETS) at an appropriate point in the future.

2. The Australia-Europe SOT will: (a) Share information on domestic climate change action and programs of relevance to both sides.

(b) Examine mechanics of linking Australia’s CPM and the EU ETS.

(c) Discuss how Australia and the EU can work together to promote deep, liquid and integrated carbon markets to enhance efforts to combat climate change.

(d) Discuss how to positively advance climate developments in other fora, including but not limited to, the UNFCCC Framework Convention on Climate Change; the International Maritime Organisation (IMO) and International Civil Aviation Organisation (ICAO).

(e) Exchange respective views on carbon markets, including international credit developments with third parties.

(f) Examine any other international matters that both sides consider relevant.

3. The SOT will provide advice to their respective Ministers/Commissioners responsible for Climate Change on: (a) specific options for direct linking of the EU and Australian ETS, including possible timing for any linking arrangement and steps needed to enact it;

(b) advice on how to advance the global application of market-based measures to limit emissions from aviation and shipping;

(c) additional options for enhanced cooperation, including in international fora; and

(d) Australia-EU collaboration to continue to build a comprehensive international carbon market.

4. The Australia-Europe Senior Officials Talks is led by the Australian Department of Climate Change and Energy Efficiency (DCCEE) and the European Commission Directorate-General for Climate Action (DG CLIMA) with officials reporting to their respective Ministers/Commissioners responsible for Climate Change.