State of the EU ETS

Over at the Lowy Interpreter I have a guest post up on the current state of the European Union's Emissions Trading Scheme in the aftermath of the EU parliament's decision not to prop up the program last week. I discuss the ETS and offer a few thoughts on the state of Australia's climate policy debates, where it looks like Julia Gillard and Tony Abbott are working together (what?!).

Here is how it starts:

Last week, in a surprise to many, the European parliament defeated a proposal to postpone the auctioning of emissions permits, a move that would have propped up prices in the bloc's carbon market, known as the EU Emissions Trading Scheme or ETS. The market reaction was quick and brutal, with the price of carbon allowances falling by more than 30%. The political reaction was similar — the Wall Street Journal wrote that the vote was the 'equivalent of the pope renouncing celibacy'.

Head over to Lowy for the rest, and feel free to come back here and tell me what you think.

Thanks!