Australia and New Zealand are to investigate coordinating their schemes for dealing with greenhouse gases.
Climate Change Minister Nick Smith has been meeting his Australian counterpart, Penny Wong, in Canberra.
They have agreed on terms of reference for a working group to explore harmonising the design of Australia's carbon pollution reduction scheme and the New Zealand emissions trading scheme.
Officials have been asked to look at a range of options, up to adopting a single scheme for both countries.
Dr Smith says any harmonisation would have to be beneficial to both countries.
National pulled its support for the ETS bill last year saying the process was being rushed and that New Zealand should wait to see what shape the Australian regime would take.
