Many questions about the operation of an international emissions trading scheme need to be resolved. We do not yet know how an international emissions trading regime might operate or what the scope might be for any domestic emissions trading regime. We want our access to traded emission credits to be on equal terms with others. Only a fair, transparent and competitive international emissions trading scheme would deliver the kind of flexibility necessary to achieve emissions reductions at the lowest possible cost. The achievement of the inclusion of sinks and the treatment of emissions from the land use change and forestry sector will require thought in implementation.
Guidelines are to be developed on the methodologies to be applied.
We need to ensure that there is no back-sliding by others on this part of the agreement. The provision in the Protocol for the Clean Development Mechanism is an important means of pursuing greater developing country participation in emissions reduction activities. These would generate emissions credits to be jointly shared with developed country investors. This concept, which was introduced at the Kyoto Conference, could be an important means of overcoming the difficulties which beset the negotiations over Joint Implementation. Australia, along with others, was disappointed that the Kyoto outcome failed to include agreement on steps for negotiations of future commitments by developing countries.