Australia is "keen" to link its new emissions trading system to California's, a top Australian climate official said yesterday.

Mark Dreyfus, Australia's parliamentary secretary for climate change and energy efficiency, said that he met earlier this week with California officials and that the government is eager for more conversations. Though he declined to speak in detail about the conversations, he noted that nine months after European Commission President José Manuel Barroso came to Australia to commence talks on joining systems, the countries announced they would merge systems no later than 2018.

"We are keen to pursue links with California, but it's a matter of discussion, and we're going to pursue those discussions. I can't tell you more, because that's the way it's done," Dreyfus said.

Australia's carbon pricing system went into effect in July with a fixed carbon tax of 23 Australian dollars ($23.85) per ton for about 300 of its largest polluters. That price will rise 2.4 percent per year until 2015, when the country moves to an emissions trading system.

Speaking at the World Resources Institute think tank, Dreyfus and Subho Banerjee, Australia's deputy secretary of the adaptation group at the Department of Climate Change and Energy Efficiency, said the past few months have defied critics' frightening forecasts of industries crashing and once-vibrant communities turning into jobless ghost towns.

They argued that economic modeling the government did before the carbon price went into effect estimating a 0.7 percent rise in consumer pricing has proved accurate.

"We've seen increased political support, or at least a lessening of opposition, because these predictions didn't come to pass, and also because we paid a lot of attention to cost of living and competitiveness concerns" in designing the policy, Dreyfus said.

Move to decouple economic growth and emissions

The system will help Australia, which has surpassed the United States as the world's largest per-capita emitter of greenhouse gases, meet its target of cutting carbon 5 percent below 2000 levels by the end of this decade. In absolute terms, Australia accounts for just 1.5 percent of global emissions.

Climate activists yesterday pushed Australia to make that target more ambitious. Dreyfus and Banerjee, however, argued that the target actually represents a 24 percent cut from where emissions would go under a business-as-usual scenario and will be tough to meet.

"It's a very significant reduction," Banerjee said. "This is a hard ask in Australia. It's quite difficult to make that much of a change."

The two argued that the country's clean energy package -- of which the emissions trading system is a part, along with a renewable energy target and energy efficiency measures -- represents Australia's attempt to impose a "fundamental decoupling" of economic growth and emissions.

Left out of the equation, however, are Australia's massive coal exports -- about 293 million metric tons in the past year alone. Dreyfus and Banerjee acknowledged that coal exports are a major concern of environmental groups. But they said no new policies are on the table to address exports and noted that emissions levels under U.N. rules are accounted for by end use.

"It is our single largest export economy. It's on our minds, but it's not the subject of policy at the moment, other than working hard on carbon capture and storage," Dreyfus said. They in turn pushed the United States to follow Australia's lead by putting a price on carbon.

"I'm running the risk of lecturing people in another country, but if Australian actions are important, U.S. actions are absolutely essential," Dreyfus said. "The U.S., as one of the world's largest emitters, sets examples, it builds confidence."

Meanwhile, they noted, Australia already is looking to New Zealand, Norway, Iceland and other countries with burgeoning carbon trading systems to explore linkages. Earlier this month, Australia and the European Union announced their pending merge.

State's focus is on launching its market

California launches its trading system in 2013. U.S. analysts said they would not be surprised to see California link with Australia but noted that it first needs to focus on getting off the ground.

"It's an interesting idea," said Kevin Kennedy, director of the World Resources Institute's U.S. Climate Initiative and the former assistant executive officer in charge of the Office of Climate Change at the California Air Resources Board (ARB). "I think there will be a lot of folks interested and supportive."

Jon Costantino, a senior adviser with the law firm Manatt, Phelps & Phillips and a former climate change planning manager at ARB, agreed.

"I believe California wants to link. One of the major policy reasons for cap and trade is to be able to link," he said. Constantino noted that the state first is focusing on getting its own program up and running.

Once that is done, the first link will likely be with Quebec. Moreover, any proposal to link with Australia would go through a lengthy rulemaking process. But, he said, "the larger the market, the more liquidity and the better the market mechanisms work."

ARB spokesman Dave Clegern was noncommittal.

"We're really focused right now on making sure our first auction runs like it should and handling the start of cap-and-trade compliance. But we're very excited that another large nation is moving ahead with this kind of climate change program," he said in an emailed statement. "We compare notes with the Australians and look forward to continuing to do so."