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Fiddling while carbon burns: why climate policy needs pervasive emission pricing as well as technology promotion

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  • John C. V. Pezzey

    (Australian National University,Centre for Resource and Environmental Studies)

  • Frank Jotzo

    (Australian National University, Research School of Pacific and Asian Studies)

  • John Quiggen

    (University of Queensland, School of Economics and Political Science)

Abstract

Effective climate policy requires global emissions of greenhouse gases to be cut substantially, which can be achieved by energy supply technologies with lower emissions, greater energy use efficiency, and substitution in demand. For policy to be efficient requires fairly uniform, fairly pervasive emission pricing from taxes, permit trading, or combinations of the two, as well as significant government support for low-emission technologies. We compare the technology-focused climate policies adopted by Australia and the 'Asia-Pacific Partnership on Clean Development and Climate' (AP6), against this ideal policy yardstick. We find that such policies omit the need for emission pricing to achieve abatement effectively and efficiently; they over-prescribe which abatement actions should be used most; they make unrealistic assumptions about how much progress can be achieved by voluntarism and cooperation, in the absence of either adequate funding or mandatory policies; and they unjustifiably contrast technology-focused policy and the Kyoto Protocol approach as the only two policies worth considering, and thus ignore important combined policy options.

Suggested Citation

  • John C. V. Pezzey & Frank Jotzo & John Quiggen, 2006. "Fiddling while carbon burns: why climate policy needs pervasive emission pricing as well as technology promotion," Economics and Environment Network Working Papers 0611, Australian National University, Economics and Environment Network.
    • Handle: RePEc:anu:eenwps:0611
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    References listed on IDEAS

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    Cited by:

    1. Pezzey, John C.V. & Mazouz, Salim & Jotzo, Frank, 2010. "The logic of collective action and Australia’s climate policy," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(2), pages 1-18.
    2. Sylvia Karlsson-Vinkhuyzen & Harro Asselt, 2009. "Introduction: exploring and explaining the Asia-Pacific Partnership on Clean Development and Climate," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 9(3), pages 195-211, August.
    3. Harro Asselt & Norichika Kanie & Masahiko Iguchi, 2009. "Japan’s position in international climate policy: navigating between Kyoto and the APP," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 9(3), pages 319-336, August.
    4. Frank Jotzo, 2007. "Climate policy in Australia and globally: where to and how?," Economics and Environment Network Working Papers 0703, Australian National University, Economics and Environment Network.
    5. Armbruster, Walter J., 2009. "Challenges and Issues in the Next Decade: A Proactive Role for Agricultural and Resource Economists," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 38(1), pages 1-7, April.
    6. Mathews, John, 2007. "Seven steps to curb global warming," Energy Policy, Elsevier, vol. 35(8), pages 4247-4259, August.
    7. Warwick J. McKibbin, 2007. "From National to International Climate Change Policy," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 40(4), pages 410-420, December.
    8. Helen King, 2008. "The challenges of finding efficient policy measures to reduce Australia'’s agricultural greenhouse gas emissions," Environmental Economics Research Hub Research Reports 0809, Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University.
    9. Pablo del Río, 2009. "Assessing the dynamic efficiency of internal mitigation projects. An evolutionary perspective," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 14(3), pages 203-213, March.
    10. King, Helen, 2008. "The challenges of finding efficient policy measures to reduce Australia’s agricultural Greenhouse gas emissions," Research Reports 94809, Australian National University, Environmental Economics Research Hub.
    11. Frank Jotzo, 2007. "Climate Policy: Where To and How?," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 14(1), pages 17-34.

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    More about this item

    Keywords

    climate policy; greenhouse gas emissions; abatement; emission taxes; emissions trading; technology policy; innovation; Asia-Pacific Partnership; AP6;
    All these keywords.

    JEL classification:

    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General

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