Tradeable energy efficiency certificates in Australia

Tradeable energy efficiency certificates are created in Australia as part of a larger baseline-and-credit emissions trading scheme, the Greenhouse Gas Reduction Scheme (GGAS) that operates in the State of New South Wales and the Australian Capital Territory. GGAS aims to reduce greenhouse gas emissions associated with the generation and use of electricity through project-based activities to offset the production of emissions. GGAS applies in two jurisdictions that are part of a wholesale electricity market operating across a total of six jurisdictions and this imposes some constraints on scheme design. Nevertheless, GGAS has developed a set of comprehensive operational systems and procedures to validate energy efficiency projects and verify the abatement they produce. To the end of calendar year 2006, nearly ten million energy efficiency certificates have been created under GGAS, representing nearly ten million tonnes of CO2-e abatement. Some significant issues have arisen regarding the creation of certificates from the mass distribution of small energy-efficient household appliances. However, the experience with GGAS still demonstrates that tradeable energy efficiency certificates can be an effective mechanism for incentivising greenhouse gas emissions abatement in the context of a baseline-and-credit emissions trading scheme.