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Australia's Carbon Pricing Strategies in a Global Context




The impact of international carbon control measures - and the absence of such measures - on Australian carbon pricing policies are analyzed both at a theoretical and empirical level. While theory and interest group advocacy suggest a potential case for destination accounting of carbon emissions and border tax adjustments and/or export exemptions, this case is sometimes exaggerated. For example, in the ferrous metals sector, empirical analysis suggests that gains from such refinements are low since carbon leakages and adverse competitiveness effects are small. In other sectors - such as non-ferrous metals - the effects are more pronounced. Exaggerating the competitiveness costs of carbon pricing runs the risk of policy overreaction and unintended protectionism, dramatically increasing the costs of Australian carbon pricing policies. Providing free and tradable emission quotas to exporters and import competing sectors is a 'second best' policy but one with practicality in sectors where adverse competitiveness effects do need to be addressed.
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Suggested Citation

  • Harry Clarke & Robert Waschik, 2012. "Australia's Carbon Pricing Strategies in a Global Context," The Economic Record, The Economic Society of Australia, vol. 88(s1), pages 22-37, June.
  • Handle: RePEc:bla:ecorec:v:88:y:2012:i:s1:p:22-37
    DOI: j.1475-4932.2012.00798.x

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    1. repec:spr:jecstr:v:6:y:2017:i:1:d:10.1186_s40008-017-0091-x is not listed on IDEAS
    2. Fraser, Iain & Waschik, Robert, 2013. "The Double Dividend hypothesis in a CGE model: Specific factors and the carbon base," Energy Economics, Elsevier, vol. 39(C), pages 283-295.
    3. Harry Clarke & Iain Fraser & Robert George Waschik, 2014. "How Much Abatement Will Australia's Emissions Reduction Fund Buy?," Economic Papers, The Economic Society of Australia, vol. 33(4), pages 315-326, December.
    4. Svetlana Maslyuk & Dinusha Dharmaratna, 2012. "Impact of Shocks on Australian Coal Mining," Monash Economics Working Papers 37-12, Monash University, Department of Economics.

    More about this item

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming


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