Policy Update: Will Australia be a major buyer in international carbon markets?

Australia put in place carbon pricing on 1 July 2012. Under the legislation, Australias carbon permit scheme will open up to international trading from mid-2015. Modeling suggests that Australias domestic emissions will be well above its national emissions target, and under the policy the gap would be covered through imports of emission reduction units from other countries. So will Australia become an important source of demand for emission reduction units? Perhaps, but there are a number of factors that are likely to reduce Australias demand, and policy uncertainty makes it impossible at this point to predict Australias future position in international carbon markets