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Global Carbon Trading

NEW ZEALAND'S emissions trading scheme has started smoothly, its first annual report says, and Australia is considering linking its carbon pricing plan across the Tasman in 2015.

The report shows that the New Zealand scheme has ''performed to expectations'' and contributed to a significant cut in the country's greenhouse gas emissions, allowing it to comfortably meet its obligations under the Kyoto Protocol.

The scheme is the same in principle as the carbon trading scheme slated to begin in Australia in 2015, but differs in detail and price, with a tonne of carbon dioxide costing $10 in New Zealand instead of the $23 starting price in Australia.

"Our emissions trading schemes do not have to be identical to link satisfactorily," said Australia's parliamentary secretary for climate change and energy efficiency, Mark Dreyfus. Such a linking would mean that companies in either country could trade permits and generate carbon offsets.

The Opposition Leader, Tony Abbott, has promised to wind back the government's carbon pricing plan if elected.

New Zealand's annual report showed the emissions trading scheme has led to a boom in the nation's renewable power stocks, with 11 new emissions-free electricity projects contributing 1340 megawatts, five times the national average increase before the scheme was introduced. More forests have been planted and maintained, due to demand for carbon offsets.

New Zealand's Minister for Climate Change Issues, Nick Smith, said: "Without the scheme, the … taxpayer could have faced a substantially greater cost of meeting New Zealand's obligations."

The message from science is clear - we urgently need to act now to reduce global carbon emissions and help stop damaging climate change.

The evidence linking human carbon emissions to global warming is clear. We need to make deep cuts in carbon emissions in order to avoid the irreversible consequences of damaging climate change.

Those consequences become severe once temperatures have risen above 2 degrees Celsius. We must and can avoid this much warming.