Tony Abbott missing signs of world's switch to carbon trading, experts say

The world's two largest economies - China and the US - are increasingly adopting carbon trading to cut greenhouse gas emissions, contrary to suggestions by Prime Minister Tony Abbott that other countries are not introducing schemes.

Speaking in Canada, Mr Abbott said carbon taxes and emissions trading were the wrong way to address climate change.

He said the debate was not about the existence of climate change, but the best approach to respond to it and he backed ''direct action measures'' such as improving energy efficiency and planting more trees.

Asked if direct action was preferable to an international emissions trading scheme, Mr Abbott said: ''There is no sign - no sign - that trading schemes are increasingly being adopted. If anything trading schemes are being discarded, not adopted.''

Kobad Bhavnagri, Australian head at analysts Bloomberg New Energy Finance, said it was wrong to claim trading schemes were being discarded. He said China started six regional emissions trading schemes in the past year - building towards a national scheme expected to be in place this decade.

In the US, he said the recently announced emissions limits on coal-fired power plants - expressed as targets imposed on the states by the Environment Protection Agency - would likely lead to more states adopting emissions trading to deliver required cuts.

''Apart from Australia I don't think any other country has plans to unwind an emissions trading scheme. That assertion they are being discarded is incorrect,'' Mr Bhavnagri said.

''In the world's two biggest economies - and the world's two biggest emitters - we are seeing quite a deliberate move towards carbon pricing and emissions trading, not away.''

Carbon Market Institute chief executive Peter Castellas said there was momentum in Australia's largest trading partners to price carbon as a way to limit emissions. He said if governments were going to oblige companies to limit emissions, then a trading scheme was the best option to do it at lowest cost.

A World Bank report released last month found the share of emissions covered by domestic carbon prices significantly increased over the past year on the back of trading schemes launched in China, California and Quebec. But it warned the push towards an international carbon credit market had stalled, with major countries such as Japan and Russia refusing to sign up to a second phase of the Kyoto Protocol - the climate treaty covering wealthy countries.

The World Bank found 39 countries, most in the European Union, and 23 states and provinces within countries have adopted either emissions trading or a carbon tax. They cover about 12 per cent of global greenhouse gas emissions.

The Abbott government has vowed to repeal Australia's carbon price and replace it with its Direct Action policy.

China is due to launch a seventh regional trading scheme this week, in Chongqing. A senior official from China's powerful National Development and Reform Commission, Sun Cuihua, last week said a national emissions trading scheme could begin in 2016 or 2017, but would be fully functional in 2020.

The US Congress has blocked attempts by President Barack Obama to install a national emissions trading scheme. But California started a scheme in 2013 and nine north-eastern US states have been involved in a scheme covering power plants since 2003.

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