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Bringing Forward the Start of Emissions Trading– Options-Stage Regulation Impact Statement – Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education

On 16 July 2013 the Minister for Climate Change announced that the commencement of the Emissions Trading Scheme (ETS) will be brought forward by one year to 1 July 2014. Previously the Government had outlined that the carbon price would be fixed for three years before transitioning to an ETS in 2015. Under an ETS the Government sets the emissions level cap for Australia; polluting entities are able to trade carbon units; and a price for these units prevails in the market. This price can vary over time. The options-stage Regulation Impact Statement (RIS) prepared by the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education (DIICCSRTE) outlines that transitioning to an ETS should be brought forward by one year as there is currently a disparity between Australia’s fixed price, and the market price which has prevailed in Europe. The RIS considered three options:

  • ‘Significant regulatory change’ – bring forward emissions trading immediately to the 2013-14 financial year.
  • ‘Less significant regulatory change’ - bring forward emissions trading to 1 July 2014.
  • ‘No regulatory change’ – transition to an ETS on 1 July 2015.

Under the new best practice regulation requirements Australian Government departments and agencies, rather than the OBPR, must assess the adequacy of their options-stage RISs. In particular, agencies must certify that the problem being addressed and the objectives of government action are well articulated; and that a range of feasible options, including regulation, no regulation or light handed regulation and do nothing, have been considered. Before relevant legislation and/or regulation is finalised the Department will need to prepare a details-stage RIS that is informed by consultation on this options-stage RIS. The details-stage RIS is formally assessed by the OBPR. The Secretary of DIICCSRTE certified that the options-stage RIS prepared by his Department meets the Government’s best practice regulation requirements.