Instrument Choice: Australia and Oceania

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The islands and archipelagos of Oceania share policy concerns with other developing countries, and with other island nations that are threatened by inundation from rising sea levels. As a consequence, policy debates in these countries have typically focused less on climate change mitigation and more on adaptation. In industrially developed Australia and New Zealand, however, the issue of policy instrumentation has been front and center in recent years.

Both New Zealand (2002) and Australia (2007) are Annex I signatories to the Kyoto Protocol. In order to enforce Kyoto compliance, the Fifth Labour Government of New Zealand legislated the New Zealand Emissions Trading Scheme in 2008. A period of transition to the NZETS will begin in 2012.  That system calls for ‘no-cap’ emissions trading, in which emissions permits are allocated based on historical emissions patterns without setting a limit on total emissions.

In 2007, the Australian government commissioned Professor Ross Garnaut to prepare a report recommending policy to address the country’s commitment to Kyoto emissions goals. The report, delivered in 2008, recommended a cap-and-trade system, though such a system, proposed by the Rudd Government, was defeated in the Australian Senate in 2009.  Subsequently, the Australian Greens proposed an interim carbon tax, which would expire in 2013.

Australia is also a member of the Asia-Pacific Partnership, an alliance intended to facilitate the coordination of Clean Development Mechanisms (technology transfers) called for by the Kyoto treaty.

The literature in this section concerns and analyzes the mitigation-policy choices facing Australia, New Zealand, and, to a lesser extent, the island nations of Oceania.