Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

Perhaps the best way of assisting here is to just reference the way in which international linking will be regulated. This really goes to the environmental integrity of international units. To step back from all the detail for a minute, the policy concept behind international linking is that this lowers the cost of meeting targets. It ensures that there is a lower cost on Australian households and Australian business by companies being able to source lower cost abatement elsewhere. It is important that it have environmental credibility. The government is very conscious of that. That is why the package before the chamber includes robust and appropriate restrictions to ensure only quality units can be used for compliance from the start of the flexible price period. Obviously this is not an issue during the fixed price period. Regulations will be made to ensure the government will not accept Kyoto units from particular projects, such as nuclear energy, industrial gas, destruction of projects and large-scale hydroelectric projects that do not conform to EU sustainability criteria.

As we discussed last night—I think it was in the answer to a question from, if I recall correctly, Senator Joyce—the integrity of international units will be assessed by the Climate Change Authority, which will make a recommendation to government as to which units should be permitted and which should be prohibited under the carbon pricing mechanism.