The Grantham Research Institute at the London School of Economics, in collaboration with Climate Bridge, Vivid Economics and the Grattan Institute has published a response to the Australian government’s discussion paper on “Price floor for Australia’s Carbon Pricing Mechanism – Implementing a Surrender Charge for International Units”.

The Australian Clean Energy Future Package, which passed on 8th November 2011 introduces a carbon price for Australia. From 2015 onwards, this will be achieved through an Emissions Trading Scheme, with a floor price. The scheme allows Liable Entities to comply by surrendering International Units (such as Certified Emissions Reductions), which will be subject to a surrender charge so that the floor price remains effective.

The Department of Climate Change and Energy Efficiency (DCCEE) is now evaluating the options for designing this surrender charge. The intention is to design a mechanism that is efficient, effective and workable. Climate Bridge is pleased to contribute to the debate, and looks forward to participating in a system that creates a well functioning trading scheme and promotes deep and liquid international markets.

The paper can be found here.

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