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Cap-and-trade: the experience Down Under

When Kevin Rudd was elected prime minister of Australia in 2007, hopes were high that climate action might soon follow. And Rudd indeed ratified the Kyoto Protocol his first day in office, which his predecessor John Howard had not done. (See this earlier Nature story for context about the role of climate in that election.)

Things are looking a lot different these days. Australia’s nascent stab at creating cap-and-trade legislation to create regulate* greenhouse gases — introduced as a white paper last December and then as draft legislation last month — is running into political trouble, as Roberta Kwok reports in this week’s issue of Nature. Perhaps not surprisingly, the problem stems in part from struggles among parties; Rudd’s Labor party does not have a majority in the Senate and only a slim majority in the House of Representatives, so he needs either opposition Liberals or the Greens on board to make the legislation reality. And that’s a long way from happening; the Liberals cite the costs of such restrictions in the economic downturn, while the Greens think its target of 5 to 15% reductions doesn’t go far enough.

On the other side of the world, the United States is just starting to embark on its own version of the same political game. On Tuesday, Congressmen Henry Waxman (Democrat, California) and Ed Markey (Democrat, Massachusetts) introduced their first draft of extensive climate and energy legislation — including an outline of a cap-and-trade system. You can read the bill in all its gloriously gorey detail here.

Alex Witze

*Corrected 2 April 2009.

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    Peter Wood said:

    A crucial difference between the Australian legislation and the US legislation is that the US places upper bounds on emissions, but not a lower bound (p. 327 of the Waxman-Markey legislation); the Australian legislation has an upper bound on emissions, but also a lower bound (Section 15 of the Carbon Pollution Reduction Scheme Exposure Draft legislation). The lower bound on emissions is likely to be 15% less than 2000 levels by 2020. What this effectively says is that Australia is unwilling to reduce emissions by more than 15% below 2000 levels by 2020 no matter what the rest of the world does. This does not facilitate international cooperation.

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