Australia’s rejection of carbon pricing would be a blow for EU efforts to link Europe’s emissions trading scheme with other parts of the world.

The EU has attempted to tackle climate change through an emissions trading scheme, and has hoped for its scheme to become the core of an international system of linked-up carbon markets. Frank Jotzo writes on developments in Australia following the country’s recent election. He notes that the new government, led by Tony Abbot, is committed to repealing Australia’s carbon pricing scheme. This has the potential to impact on the EU’s efforts to link up its emissions trading scheme with other systems, and could spillover into the approaches of other countries across the world.