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Housing : September 2008
ETS (emissions trading scheme) is the new buzz word and a topic which is likely to be high on the political agenda as the introduction of an Australian scheme draws closer. But for the housing industry, what does it really mean? Emissions trading has been on the drawing board for several years, explains HIA's Executive Director Building Policy Kristin Tomkins. With the Rudd government's release of the Green Paper Carbon Pollution Reduction Scheme, she says, Australia is now well underway to introducing an emissions trading scheme by 2010. It has been agreed for some time that the Australian scheme will be a 'cap and trade' format. The Green Paper sets out the details of how this will most likely operate. 'The government will first set a "cap" on carbon pollution -- in other words, a target level of emissions that can be produced by companies who generate greenhouse emissions,' Kristin says. 'The cap provides the baseline for any environmental improvement. Australia has indicated its intention to achieve the necessary reductions to meet the Kyoto target of reducing emissions by 60 per cent compared with 2000 levels by 2050. HOUSING SEPTEMBER 2008 24 ETScap & trade What is emissions trading and how will it affect you or your business? HIA's Kristin Tomkins spoke to Housing. Emissions Trading Scheme There are 7.6 million registered businesses in Australia, the vast bulk of whom will not have direct obligations 'The process of establishing a cap, then, artificially creates a carbon price, based on the need for carbon permits to be bought by companies who emit greenhouse gases. Permits will then be issued which equal the cap, being one permit for one tonne of greenhouse gas emissions. For example, if the cap were to limit emissions to 100 million tonnes of carbon then 100 million permits would be issued for that year.' The market will then determine the carbon price depending on the number of permits allocated each year. Preliminary estimates have been done using a cost of $20 per tonne, but