The Ministry for the Environment is also starting a series of regional ETS consultations as a pre-regulatory move; change is on the way. What we do know is that Kyoto's first commitment period comes to a halt at the end of this year and we have to set a national "carbon budget" to 2020. Will we sign up to Kyoto's second commitment period or revert back to United Nation's looser Framework Convention on Climate Change?
I'm generally a fan of revenue-neutral carbon taxes set at relatively low levels but capable of being ramped up as more of our trading partners adopt them. But I've also wondered whether we'll be Python's lonely Sergeant-Major marching up and down the square by himself on Kyoto penalties, with the rest of the squad headed off to see a film. Recall that Kyoto penalties are only binding if we choose to sign on for the successor agreement. If few are signing on, there may be more effective things we can do on climate change than buying carbon credits from defunct Russian factories.