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Auckland Wellington Christchurch www.buddlefindlay.com Alastair Cameron Senior Solicitor 31 July 2009 IPS/NZCCRI Seminar Emissions Trading – Harmonisation with Australia: Issues and Options
2© Buddle Findlay 2009
3 Question To harmonise or not to harmonise? Should that be the question?
4© Buddle Findlay 2009 Outline Levels of harmonisation – options Achieving harmonisation – Specifying the parties harmonisation commitments – Institutional and operational structures required to support harmonisation Issues with harmonisation Conclusions
5© Buddle Findlay 2009 Options for levels of harmonisation Level 1:Voluntary adoption of key design features, but no mutual recognition of domestic units Level 2:Mutual recognition of domestic units, enabling trading between the schemes Level 3:Full harmonisation (effectively one scheme) (Senator Penny Wong and Hon Dr Nick Smith, 19 March 2009)
6© Buddle Findlay 2009 Making harmonisation commitments Bilateral treaty – Advantages (legally binding, provides certainty) – Disadvantages (time consuming to negotiate, difficult to amend or withdraw from) Political agreements – Advantages (flexible, carries political weight) – Disadvantages (not legally binding, uncertain outcomes) Mutual domestic commitments – Advantages (flexible) – Disadvantages (subject to unilateral change)
7© Buddle Findlay 2009 Institutional and operational support Co-management / joint governance Joint regulatory body Consultations, e.g. regular meetings of ministers and/or officials Amendments and reviews
8© Buddle Findlay 2009 Possible frameworks TEXTSUPPORT LEVEL 3: Full harmonisation (one scheme) Treaty Joint regulation (political and operational) LEVEL 2: Mutual trade of domestic units Treaty Political cooperation agreement Joint regulation Consultation LEVEL 1: Voluntary adoption of key design features Political cooperation agreement (but not essential) Ongoing consultation likely
9© Buddle Findlay 2009 Issues Control Flexibility Transparency Legitimacy
10© Buddle Findlay 2009 Conclusion – to harmonise or not to harmonise? Not just a question of the economic costs and benefits Also important to consider broader issues presented by harmonisation Better to focus on getting our own scheme right first?
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