Carbon Market Institute (CMI) reposted this
Prof, ANU Crawford School & Head of Energy, Institute for Climate Energy & Disaster Solutions | Australia's Carbon Leakage Review | NSW Net Zero Commission | QLD Clean Economy Expert Panel
Today the Australian government released the second consultation paper for the Carbon Leakage Review. The paper and other information is available here: https://lnkd.in/gVhD3Cbg As lead reviewer, I’ll anchor the consultations, together with the Review team at the Department for Climate Change, Energy, Environment and Water (DCCEEW). We warmly welcome input from stakeholders in Australia, and internationally. Consultation is open until 3 December. In a recorded webinar on 6 Nov, 11.30 AEST we’ll run through our analysis and preliminary findings. The Review will make its recommendations to government by the end of 2024. Government has not yet considered the findings. The paper describes our analysis and sets out our preliminary findings. The Review has · analysed potential future carbon leakage risks including materiality of such risk for individual commodities, on the basis of quantitative and qualitative analysis; · assessed different possible policy approaches to address leakage risks; and · investigated the feasibility and potential impacts of border carbon adjustments. The Review’s work is guided by the following principles. One, the overall goal is to promote economically efficient low and zero emissions industrial production towards net-zero trajectories. A durable market-based system to incentivise investments in low and zero emissions industries is important to this. The Review focuses on carbon leakage solely in terms of shifts in industrial production due to differences in climate change policy between countries, not on other policy objectives. Two, the Review places emphasis on Australia’s opportunity to become a major producer and exporter of clean energy and industrial commodities in a net zero world economy. Policy frameworks that provide market premiums for low emissions products, including for traded goods, can contribute to this goal. Addressing carbon leakage means helping create the preconditions for investment in new low emissions industrial structures in the most suitable locations, rather than shielding existing high emissions processes from change. Three, the Review places importance on the international rules-based trading system and on maintaining open and liberal trade relationships, especially in Australia’s region. Our economic prosperity has been enhanced by open trade, and strong trade relations will be vital to achieve net zero emissions in Australia and globally. The Review seeks to identify ways in which any potential future measures, especially potential border carbon adjustments, respect international trade rules and obligations, facilitate trade that is consistent with climate change policy objectives, and could be collaboratively implemented with Australia’s trade partners. We also seek to identify opportunities to support progress in multilateral and plurilateral forums. We look forward to your reactions and input to the process.