Linking the Australian Emissions Trading Scheme

by Frank Jotzo and Regina Betz

- This paper evaluates the proposed Australian scheme with regard to international emissions trading and linkages. Different scenarios for the Australian permit price under unilateral linking are considered. Options for bilateral linking with the European Union and New Zealand schemes are evaluated, including regarding access to ‘hot air’ units. We argue that Australia should dismantle obstacles to linking such as the price cap, and move toward bilateral linking with suitable schemes.

Jotzo, F. and R. Betz (2009). "Linking the Australian Emissions Trading Scheme." Environmental Economics Research Hub, Crawford School, ANU, Research Report No. 14, Feb 2009.