This report outlines the state of play in international cooperation on climate change and the possible development of emissions trading at the global level. Against this background, the report outlines a proposed Australian domestic emissions trading scheme, together with a set of complementary policies and measures.

In December 2006 the prime minister announced the establishment of a joint government-business Task Group on Emissions Trading. This paper provides the context for the work to be undertaken by the group, setting out some of the relevant issues and questions on which the group would value public comment.