Australia and New Zealand have agreed to investigate linking their greenhouse gas emissions trading schemes.
Officials are to be appointed to investigate linking the schemes so that carbon permits could be traded between the two countries.
New Zealand recently introduced a national scheme where polluters trade permits, while Australia’s plan to introduce a similar scheme has been bogged down in a bitter political row.
Australia plans to introduce a tax on carbon gases starting in July 2012. The tax would be converted into a trading scheme within five years in which the price for a permit will be set by free market forces rather than regulated by the government.
The Australian prime minister, Julia Gillard, is to soon announce the tax rate Australia will set on a tonne of carbon dioxide.
The tax is already unpopular in opinion polls, and the opposition has said it will repeal the tax if they win office.