Australia’s carbon price will be linked to carbon markets around the world
This will allow businesses to reduce carbon pollution at the lowest cost and also help developing countries adopt clean technologies.
International linking will start when the carbon price moves to the flexible price period on 1 July 2015. Australian businesses will be able to buy international units from credible international carbon markets or emissions trading schemes in other countries. They will be allowed to use these units to meet some of their local obligations.
When an Australian business buys an international unit, it means that a tonne of pollution will not be released overseas. Safeguards will be in place to ensure the international units are credible and do not undermine the environmental integrity of Australia’s pollution reduction efforts.
Australian businesses cannot meet all their carbon reduction obligations by purchasing international units. Until 2020, they will have to meet at least half of their annual obligations each year by buying carbon units or Australian Carbon Credit Units (ACCUs).
It will be more efficient and less costly to reduce Australia’s carbon pollution using this mixture of domestic reductions and international unit purchases.
International linking allows Australian businesses to pursue credible, cheaper carbon pollution reduction opportunities wherever they are available.
More information about international linking is available here.