Key Point
- One of the main issues for business will be the cost of complying with any new reporting regime.
The competition between the States and the Commonwealth to establish an emission trading scheme in Australia has seen a renewed focus and a sense of urgency surrounding the need for accurate data on greenhouse gas ("GHG") emissions.
One only has to look at the European experience during Phase 1 of the European emissions trading scheme ("EU ETS") (2005-2007) to recognise how inaccurate data can undermine a new market for carbon credits. Poor and incomplete data from European Union member states and industries on their GHG emissions resulted in a significant over-allocation of allowances under National Allocation Plans. Once it became apparent that, contrary to initial expectations, the market would be long for credits, the price of the Phase 1 allowances plummeted. The relatively short first phase of the EU ETS, however, has largely eliminated this problem and the
