Australia has confirmed it will link its emerging carbon market with New Zealand's greenhouse emissions trading scheme, after similar assurances to the European Union.
The development of transtasman carbon trading has been mooted since early policy promises by former Prime Minister Helen Clark and former Australian Liberal PM John Howard.
But the proposal has been frustrated by political problems in Australia that saw fully-fledged emissions trading collapse with the coup in which Julia Gillard ousted predecessor Kevin Rudd. Gillard, against unrelenting opposition, has since launched a carbon price that will take effect from July 1, and which under present Labor policies will evolve into an emissions trading scheme in 2015.
Parliamentary climate change secretary Mark Dreyfus told the Australia and New Zealand Sustainability Circle in Melbourne that Canberra still intended linking its planned scheme with New Zealand's.
"The relationship between Australia and New Zealand on climate change is long-standing and strongly collaborative," he said.
"Both our countries are driving clean technology investments and adopting economic policies to transition to low carbon energy sources."
He said Australia's carbon price would be linked to carbon markets around the world, allowing reductions in carbon pollution to be pursued globally at the lowest cost.
This week the South Korean parliament passed an emissions trading scheme covering 60 per cent of the country's greenhouse gas emissions, bringing to 34 the number of nations moving to similar programmes.
Dreyfus said the international linking of carbon markets would allow carbon-emitting businesses in one country to be matched with businesses in other countries able to reduce their carbon pollution at lower costs.
"From the beginning, this Government has specifically identified linking a carbon price with credible schemes, including those of New Zealand and the European Union, as being of national interest," he said.
Dreyfus said the longer countries delayed taking action the higher the costs of tackling climate change would be, increasing the risk of dangerous climate change, locking in emissions-intensive investments in sectors such as electricity generation, and deferring new investments in low-emission technology, industries and jobs.
A new global emissions reduction agreement would be completed by 2015 and come into effect from 2020, requiring countries to take action now to ensure their economies had time to adjust.
Dreyfus said the new carbon price would cover the largest 500 polluters, creating a powerful economic incentive for businesses to invest and innovate and find the cheapest and most effective way of reducing their carbon pollution.
The price signal would also flow through the economy, encouraging businesses to reduce costs.
As well as pricing carbon, Australia had launched a Renewable Energy Agency to boost research and development, and a A$10 billion ($13 billion) Clean Energy Finance Corporation to sidestep capital market barriers.
Dreyfus also said the nation's renewable energy target would underpin investment in renewable energy sources such as solar, wind, tidal and geothermal power, to deliver at least 20 per cent of Australia's electricity from renewable sources by 2020.
With the carbon price, this was expected to drive A$20 billion of investment in large-scale renewable energy within eight years.