European Union and Australia to discuss linking carbon-emission trade schemes

The European Union and Australia have began tentative talks to discuss ways in which the two can combine their respective carbon-emissions trading schemes.

Australian Prime Minister Julia Gillard said that the EU and Australia will hold preliminary discussions in the near future – a further example of Australia’s pledge to mitigate carbon emissions and combat climate change.

Speaking after a meeting with Gillard in Canberra, European Commission President Jose Manuel Barroso said, “Australia's decision to put a price on carbon emissions is, in our view, an important step, both environmentally and economically.”

“It is in our view and the European experience, the most cost-efficient way to reduce emissions and also create green business opportunities. We will now continue our joint work for a global climate regime and also on a bilateral basis we will see what we can do together,” Barroso added.

Europe is the world’s largest carbon market by some distance and the continent launched its own carbon-emission trading scheme in 2005 by capping the emissions of Europe’s heavy industries, this forced factories and utility firms to purchase carbon permits to offset carbon outputs.

Two months ago Gillard revealed Australia’s plans to impose a tax on carbon emissions from July 2012, to be replaced by a carbon trading scheme from mid-2015.

The proposals were met with fierce criticism from Australia’s tourist trade in particular, claiming that the enforcement of a carbon tax would have disastrous consequences for their trade. However, British Prime Minister David Cameron was quick to lend his support to the scheme by writing to the Australian Prime Minister personally. "I was delighted to hear of the ambitious package of climate change policy measures you announced on 10 July and wanted to congratulate you on taking this bold step," the Prime Minister wrote.

The scheme though is struggling to gain public support, with latest opinion polls suggesting that Gillard would be removed from power if an election was called tomorrow. With the next election due in 2013, Gillard is standing firm and is confident that dwindling public support can be swayed if she can acquire the full backing of the European Union.

"Given our mutual interest in developing carbon markets to drive efficiencies, the president and I have agreed today to establish senior officials' talks to discuss economy-to-economy measures we can jointly undertake to link our emissions trading schemes," Gillard announced at a Canberra news conference.