Carbon trading
Addressing climate change not only presents challenges for the NSW economy - it will also create major economic opportunities.
As the review undertaken by Sir Nicholas Stern for the UK Government into the economics of climate change highlighted, one of the major economic opportunities will arise from the development of carbon markets to buy and sell pollution permits, and the professional services needed to support a carbon market.
Carbon trading, also known as emissions trading, is a market-based approach to address climate change.
An emissions trading scheme sets a target for reducing greenhouse gas emissions by allocating a fixed number of permits, and enables market participants to find the cheapest way of meeting the target - be it by cutting their own greenhouse gas emissions, or buying and selling permits from other parties.
The NSW Government's Greenhouse Gas Reduction Scheme (GGAS) was one of the first mandatory emissions trading schemes in the world. It was introduced in January 2003 and remains the world's second largest carbon market in terms of both volume and its value of carbon credits (Source: The World Bank).
The Australian Government is establishing the Carbon Pollution Reduction Scheme (CPRS) which will be the first national emissions trading scheme in the Asia-Pacific. The value of the carbon market under the CPRS is expected to be $8-11 billion per annum.
Sydney is uniquely poised to become the carbon market trading hub as the first financial centre to open in the Asia time zone, and is home to most head offices of major international banks, fund managers and brokerage firms.
Sydney Carbon Market Taskforce
The NSW Government has established the Sydney Carbon Market Taskforce to assist in the development and implementation of a strategic action plan to establish Sydney as a carbon trading and finance hub for the Asia Pacific region.
The Sydney Carbon Market Taskforce comprises a panel of experts in relation to carbon markets. These panel members include:
- Adj. Prof. Martijn Wilder (Chair), Partner and Head of Baker & McKenzie Global Climate Practice & Adjunct Professor Climate Change Law, ANU
- David Gonski AC, Chancellor UNSW, Chairman, Investec Bank (Australia); Coca-Cola Amatil Ltd
- Prof. Fred Hilmer, Vice-Chancellor & President UNSW
- Dr. Michael Molitor, CEO Carbon Shift Ltd
- Jillian Broadbent AO, Board Member, Reserve Bank of Australia
- Anthony Collins, General Manager Emerging Markets, Australian Securities Exchange
- John Marlow, Global Head Environmental Products, Macquarie Bank, London
- Emma Herd, Director Emissions and Environment, Westpac
For further information, please see the carbon trading frequently asked questions.
Page last updated: 21 April 2009
