AUSTRALIAN CAP-AND-TRADE TEST SET FOR 2011

Two important reasons to watch this one closely: (1) Howard has long been a skeptic and is determined not to do anything detrimental to his economy. (2) New Zealand is already on board and this may be the system the Asia Pacific Economic Cooperative (APEC) adopts, bringing a lot of important countries (including the U.S. and China) into a capping system.

Australia Prime Minister Sets Country’s Sights on Carbon Trading System by 2011
July 17, 2007 AP via Yahoo Finance)

WHO
Australian Prime Minister John Howard
There's just not enough here yet to see how the system will work. (click to enlarge)

WHAT
- PM Howard is carefully rolling out an Australian cap-and-trade system, giving small hints of what it will look like and big reassurances he will protect business and the economy.
- Possible key takeaway: Howard did say some carbon credits will be allocated and some will be auctioned. This is crucial. Freely giving businesses abundant credits means their value, the cost of buying them for further emissions, would be low. That makes it easier to keep emitting. An auction will keep the value of credits higher.

WHEN
- Caps to be set in 2008, following impact studies. A cap-and-trade system will be invoked in 2011.
- Howard faces elections later this year and climate change is a major issue. Some say Howard is withholding specific reduction targets until after the elections.

WHERE
- Howard’s statement came in Canberra. It was posted on YouTube.
- APEC leaders' summit will be in Sydney, in September.

WHY
- Howard is the cautious, conservative voice in this scenario while business and climate change advocates both advocate for clearly stated emissions control parameters. Those 2 factions will no doubt eventually split over the extent of the caps, which Howard has not yet revealed.
- Australia is among the worst GHG emitters in the world, per capita. Like the U.S., it did not sign on to the Kyoto Protocols.
- Howard proposes to prepare businesses with carbon cutting measures before the system goes in.
- Also announced: $546 million in climate change measures, including solar hot water system rebates and nuclear energy research.
If Howard sells his system to APEC, it could affect a big part of the world's economy. (click to enlarge)

QUOTES
- Howard: "All the good intentions in the world are worthless if we wreck our economy for no environmental gain…With so much at stake we must not confuse panic with virtue…Australia will more than play its part to address climate change, but we will do it in a practical and balanced way…"
- Catherine Fitzpatrick, Greenpeace: "If you read between the lines of the prime minister's speech, the clear signal being sent is that it is business as usual for the large industrial coal polluters…"