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Interview: Greenfleet on the Voluntary Carbon Market

Carbon Offsets Daily: When do you think the domestic voluntary carbon market will become a
compliance market and how will that change affect the environment?

Greenfleet: Australias mandatory emissions trading scheme is expected to commence in 2010.  Very soon!  Reports to date suggest that there will be at least 70% sector coverage including transport and stationary energy production.  It is likely that forestry, agriculture and waste will be included in the AETS within a couple of years.

The scheme proposal is currently focusing on the Australian Government auctioning permits (rather than allowing offsets).  This means that the mandatory market will reward reductions in emissions by avoiding permit costs at the source (ie. power generator, fuel producer) which is a purely market based mechanism that doesnt rely on regulated reductions in emissions.

The costs of the permits will depend on the number of permits issued and the relative demand (ie. if bigger reductions are achieved this will likely reduce demand for permits and thus their price).  Will this approach change consumer behavior?  We recognize that the embedded cost of a carbon permit is less likely to have an impact on consumer behavior than the skyrocketing cost of oil.  It will no doubt provide a signal to power generators that there is an embedded cost of carbon in the mainly coal generated power (Australian) that they produce. Separating the energy cost versus the carbon cost may be difficult under the scheme proposals we’ve seen to date.

At this stage the mandatory AETS does not provide incentives for net sink activities or downstream efficiency savings by consumers and we expect that a voluntary market will continue alongside the mandatory scheme to address these needs.

Most Greenfleet supporters are doing more than just reducing emissions to meet a Kyoto or other Government target.  Individuals and organizations support Greenfleet so real actions are being taken to reduce the impact of the emissions that they generate

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