Three carbon trading experts have commended the Prime Ministerial Task Group on Emissions Trading Report that discusses policy for greenhouse gas reduction in post-2012 Australia, when the initial Kyoto Protocol commitment expires. The report suggests a 2011-2012 starting date for emissions trading.

The Prime Ministerial Task Group on Emissions Trading Report was commisioned by the Prime Minister on 10 December 2006 and was made public on 31 May 2007.

Professor Warwick McKibbin, Executive Director of the Centre for Applied Macroeconomic Analysis at the Australian National University and Professorial Fellow at the Lowy Institue for International Policy, was optimistic about the report.

“This is an excellent report that lays out a sensible approach to climate policy for Australia - indeed for the world community. It moves away from the Kyoto short term targets and timetables at any cost approach, to a clear policy of setting long term goals and long term markets to price these goals. The long term prices will drive technological innovation while the short term carbon prices will be capped to minimise the cost," Professor McKibbin said.

"It draws heavily on the McKibbin-Wilcoxen Blueprint approach with some differences in the precise mechanisms of implementation. Although I have some difference of opinion on the alternative ways of implementing the policy, these criticisms are minor relative to the importance of establishing the philosophical approach clearly laid out in the report. I hope this will be seen as the model to move the global community forward on sensible climate policy, beyond the Kyoto Protocol.”

Dr Steve Hatfield-Dodds, policy economist and convenor for the CSIRO Integration Network said, “The Task Group report represents an important watershed in Australian climate policy, particularly the conclusion that ‘timely and decisive action is warranted’ to establish a national emissions trading scheme and begin taking steps to reduce our emissions."

Designing and implementing emissions trading will be complex, and it is important to invest the time and effort required to get it right.  But we should also recognise that delaying global emissions reductions risks more rapid climate change and more severe long run impacts.  A balance needs to be struck,” Dr Hatfield-Dodds commented. 

Dr Ben McNeil, Senior Research Fellow at the University of New South Wales' Climate Change Research Centre, felt that the timeframe set for greenhouse gas reduction was important.

"The taskforce recommends the Australian government to set a post-2012 target for reducing greenhouse gas emissions, which is critical for the effectiveness of a carbon emissions trading scheme.  The government set target is therefore the primary determining factor in how effective the scheme will be.  If the government target is too weak then a carbon emissions trading scheme will be a wasted exercise in significantly reducing greenhouse gas emissions for the medium to long term," said Dr McNeil.

The Task Group were asked to advise on the nature and design of a workable global emissions trading system in which Australia would be able to participate while maintaining a competitive advantage through the possession of large reserves of fossil fuels and uranium.

Global emissions trading systems were evaluated by the following criteria:

- Environmental effectiveness. The capacity to deliver long-term reductions in greenhouse gas emissions. Environmental integrity would also be affected by the potential for ‘carbon leakage’, where emissions savings made in one jurisdiction are redistributed globally without any reduction in total global emissions.
- Economic efficiency. The capability to achieve emissions reductions in a cost-effective manner.
- Equity and distributional balance. The recognition of diverse national efforts across different jurisdictions and sectors as comparable in terms of the overall global effort.

Over 200 public submissions on key issues were accepted and considered by the Task Group.

The Task Group consisted of Dr Peter Shergold (Chair), Mr David Borthwick, Mr Peter Coates, Mr Tony Concannon, Dr Ken Henry, Mr Russell Higgins, Ms Margaret Jackson, Mr Michael L’Estrange, Mr Chris Lynch, Mr John Marlay, Mr Mark Paterson and Mr John Stewart.

Click here to access the full report.