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Linking the Australian Emissions Trading Scheme

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  • Jotzo, Frank
  • Betz, Regina

Abstract

A detailed proposal for an economy-wide emissions trading scheme in Australia was tabled by the government in December 2008 with a proposed start date for mid-2010. The government proposes unilateral linking, with no initial bilateral linkages, through the clean development mechanism and joint implementation. The proposal has resulted in serious concern about significant permit price increases and price capping, leading to a ban on permit sales. This research paper evaluates the proposed Australian scheme in relation to international emissions trading and linkages. Different scenarios for the Australian permit price under unilateral linking are considered. Options for bilateral linking with the European Union and New Zealand schemes are also evaluated, including access to ‘hot air’ units. The research paper argues that Australia needs to dismantle linking obstacles, such as the price cap, and move towards suitable bilateral linking schemes.

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Bibliographic Info

Paper provided by Australian National University, Environmental Economics Research Hub in its series Research Reports with number 94814.

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Date of creation: Feb 2009
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Handle: RePEc:ags:eerhrr:94814

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Keywords: climate change policy; Australia; emissions trading; international linkages; Environmental Economics and Policy; Resource /Energy Economics and Policy;

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References

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  1. Christoph Böhringer & Ulf Moslener & Bodo Sturm, 2007. "Hot air for sale: a quantitative assessment of Russia’s near-term climate policy options," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 38(4), pages 545-572, December.
  2. Anger, Niels, 2008. "Emissions trading beyond Europe: Linking schemes in a post-Kyoto world," Energy Economics, Elsevier, vol. 30(4), pages 2028-2049, July.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Carbon price floor axed, but EU market links a good substitute
    by Frank Jotzo, Director, Centre for Climate Economics and Policy at Australian National University in The Conversation on 2012-08-28 05:33:27
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Cited by:
  1. Hahn, Robert W. & Stavins, Robert N., 2010. "The Effect of Allowance Allocations on Cap-and-Trade System Performance," Working Paper Series rwp10-010, Harvard University, John F. Kennedy School of Government.
  2. Regina Betz & Stefan Seifert & Peter Cramton & Suzi Kerr, 2009. "Auctioning greenhouse gas emissions permits in Australia," Environmental Economics Research Hub Research Reports 0929, Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University.
  3. Peter Lawrence, 2009. "Australian climate policy and the Asia Pacific partnership on clean development and climate (APP). From Howard to Rudd: continuity or change?," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 9(3), pages 281-299, August.

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