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An assessment of a proposed ETS in Australia by using the MONASH-Green model

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  • Nong, Duy
  • Meng, Sam
  • Siriwardana, Mahinda

Abstract

Using the MONASH-Green model and a database containing detailed energy sectors, this paper evaluates the effects of a proposed emissions trading scheme on the Australian economy and the emissions levels. The simulation results indicate that the price of carbon permits has to increase from A$4.1 per tonne in 2015 through A$13.1 per tonne in 2020 to A$41.3 per tonne in 2030 to achieve a target of 28% below the 2005 level in 2030. The main buyers of permits would be the agricultural sector, black-coal electricity sector and brown-coal electricity sector. Compared to the business-as-usual scenario, Australia's GDP is projected to be 0.85% lower in 2020 and 1.6% lower in 2030. Household welfare, measured in terms of equivalent variations, will increase due to compensations provided by the government. The results also lend strong support towards the transition to renewable energy. The stylised model was adapted to inform the results of the full model.

Suggested Citation

  • Nong, Duy & Meng, Sam & Siriwardana, Mahinda, 2017. "An assessment of a proposed ETS in Australia by using the MONASH-Green model," Energy Policy, Elsevier, vol. 108(C), pages 281-291.
    • Handle: RePEc:eee:enepol:v:108:y:2017:i:c:p:281-291
    DOI: 10.1016/j.enpol.2017.06.004
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    Cited by:

    1. Nong, Duy & Nguyen, Duong Binh & Nguyen, Trung H. & Wang, Can & Siriwardana, Mahinda, 2020. "A stronger energy strategy for a new era of economic development in Vietnam: A quantitative assessment," Energy Policy, Elsevier, vol. 144(C).
    2. Haoran Zhang & Rongxia Zhang & Guomin Li & Wei Li & Yongrok Choi, 2020. "Has China’s Emission Trading System Achieved the Development of a Low-Carbon Economy in High-Emission Industrial Subsectors?," Sustainability, MDPI, vol. 12(13), pages 1-20, July.
    3. Nong, Duy & Simshauser, Paul, 2020. "On energy and climate change policies: The impact of baseline projections," Applied Energy, Elsevier, vol. 269(C).
    4. Nong, Duy & Siriwardana, Mahinda, 2018. "Effects on the U.S. economy of its proposed withdrawal from the Paris Agreement: A quantitative assessment," Energy, Elsevier, vol. 159(C), pages 621-629.
    5. Siriwardana, Mahinda & Nong, Duy, 2021. "Nationally Determined Contributions (NDCs) to decarbonise the world: A transitional impact evaluation," Energy Economics, Elsevier, vol. 97(C).
    6. Nong, Duy, 2018. "General equilibrium economy-wide impacts of the increased energy taxes in Vietnam," Energy Policy, Elsevier, vol. 123(C), pages 471-481.
    7. Nong, Duy & Siriwardana, Mahinda, 2018. "Potential impacts of the Emissions Reduction Fund on the Australian economy," Energy Economics, Elsevier, vol. 74(C), pages 387-398.
    8. Nong, Duy & Nguyen, Trung H. & Wang, Can & Van Khuc, Quy, 2020. "The environmental and economic impact of the emissions trading scheme (ETS) in Vietnam," Energy Policy, Elsevier, vol. 140(C).
    9. Zhaojun Wang & Duy Nong & Amanda M. Countryman & James J. Corbett & Travis Warziniack, 2020. "Potential impacts of ballast water regulations on international trade, shipping patterns, and the global economy: An integrated transportation and economic modeling assessment," Papers 2008.11334, arXiv.org.
    10. Kiuila, Olga, 2018. "Decarbonisation perspectives for the Polish economy," Energy Policy, Elsevier, vol. 118(C), pages 69-76.
    11. Chen, Xing & Lin, Boqiang, 2021. "Towards carbon neutrality by implementing carbon emissions trading scheme: Policy evaluation in China," Energy Policy, Elsevier, vol. 157(C).
    12. Nong, Duy, 2020. "Development of the electricity-environmental policy CGE model (GTAP-E-PowerS): A case of the carbon tax in South Africa," Energy Policy, Elsevier, vol. 140(C).
    13. Di Zhou & Xiaoyu Liang & Ye Zhou & Kai Tang, 2020. "Does Emission Trading Boost Carbon Productivity? Evidence from China’s Pilot Emission Trading Scheme," IJERPH, MDPI, vol. 17(15), pages 1-16, July.

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    More about this item

    Keywords

    Australian economy; Emissions trading scheme; Energy sectors; MONASH-Green model;
    All these keywords.

    JEL classification:

    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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