Should Australia Introduce a Japanese style Joint Crediting Mechanism?

The Paris Agreement reinvigorated the use of carbon markets as a response to climate change. In particular, a new measure was proposed to replace the Clean Development Mechanism (CDM) (and Joint Implementation). In this environment Japan's Joint Crediting Mechanism (JCM) takes on renewed interest. Under this mechanism Japanese entities generate carbon credits from projects that reduce foreign emissions. The measure borrows from the CDM but seeks to address its inadequacies. Although Australia's emissions strategy is currently domestically focused cost considerations are likely to lead to a reconsideration. The opportunity for Australia and Australian entities to count (cheaper) emissions reductions in foreign jurisdictions could see a policy of embracing or replicating Japan's JCM. This article concludes that should the Australian government alter its policy in the foreshadowed 2020 review to recognise foreign credits then it could adapt its Emissions Reduction Fund (and safeguard mechanism) to accept JCM credits. Alternatively, it could implement an Australian version of a JCM