What is ETS?
What is the ETS and how does it work?
The Kyoto Protocol sets binding targets for the reduction of greenhouse gas emissions. To meet these targets the CPRS aims to reduce Australia’s emissions of greenhouse gases by requiring large emitters to measure their emissions.
Businesses can offset their emissions through permits with penalties in place if there are insufficient ‘permits’ to off-set emissions. Permits will be tradeable – forming the basis for the ETS.
The ETS in Australia, like other carbon trading schemes, seeks to reduce the amount of CO2 put into the atmosphere through human-induced processes.
The Australian Government will control the total quantity of permits available to cap on Australia’s greenhouse emissions. The cap will be progressively tightened in line with Australia’s emissions reduction targets.
The introduction of market-based schemes to bring about change is not new, but considerable debate surrounds the proposed ETS. This is based on speculation if the world’s climate is changing and the economic consequences for Australia.