Australia and New Zealand are ready to work together to combat climate change -- with the two countries developing similar and compatible carbon reduction schemes, their finance ministers said on Thursday. "Both schemes have a lot in common. It is desirable that we work together and link our schemes over time," Australian Treasurer Wayne Swan said after a day of talks with New Zealand Finance Minister Michael Cullen. The vastly different economies, one based on agriculture and the other on mineral resources, meant the two schemes "will always have some differences," Swan added.Cullen welcomed Australia's introduction of an emissions trading scheme on "a similar timeframe to New Zealand" with both coming into partial effect in 2010.

Both countries believe their emission schemes must cause behavioral change among emitters, Cullen said, as responsible governments "don't put their heads in the sand and hope climate change will go away." He noted that Australia, like New Zealand, plans to include agriculture in its emissions scheme. The ministers also held detailed talks on developing a single economic market linking the economies, and announced several new moves. These included a new arrangement for private retirement savings portability between the two countries to be settled by October, negotiations on a new double tax treaty to be completed by year end, and a new bilateral investment agreement to be completed by early 2009.