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Australia's emissions trading scheme: opportunities and obstacles for linking

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  • FRANK JOTZO
  • REGINA BETZ

Abstract

Australia is establishing an economy-wide emissions trading scheme, with a detailed proposal tabled by government in December 2008 and a scheme start planned for 2011. The proposal is for unilateral linking through the Clean Development Mechanism and Joint Implementation, but no initial bilateral linkages. Concerns about permit prices rising too high are prominent, and are reflected in a ban on permit sales and a price cap provision. This article evaluates the proposed Australian scheme with regard 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 evaluated. We argue that Australia should dismantle the obstacles to linking, including the proposed price cap, and move towards bilateral linking with suitable schemes.

Suggested Citation

  • Frank Jotzo & Regina Betz, 2009. "Australia's emissions trading scheme: opportunities and obstacles for linking," Climate Policy, Taylor & Francis Journals, vol. 9(4), pages 402-414, July.
  • Handle: RePEc:taf:tcpoxx:v:9:y:2009:i:4:p:402-414
    DOI: 10.3763/cpol.2009.0624
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    1. repec:cup:cbooks:9780521744447 is not listed on IDEAS
    2. Jotzo, Frank & Betz, Regina, 2009. "Linking the Australian Emissions Trading Scheme," Research Reports 94814, Australian National University, Environmental Economics Research Hub.
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    Cited by:

    1. Fankhauser, Samuel & Hepburn, Cameron, 2010. "Designing carbon markets. Part I: Carbon markets in time," Energy Policy, Elsevier, vol. 38(8), pages 4363-4370, August.
    2. Betz, Regina & Owen, Anthony D., 2010. "The implications of Australia's carbon pollution reduction scheme for its National Electricity Market," Energy Policy, Elsevier, vol. 38(9), pages 4966-4977, September.
    3. Fankhauser, Samuel & Hepburn, Cameron, 2010. "Designing carbon markets, Part II: Carbon markets in space," Energy Policy, Elsevier, vol. 38(8), pages 4381-4387, August.
    4. Wood, Peter John & Jotzo, Frank, 2011. "Price floors for emissions trading," Energy Policy, Elsevier, vol. 39(3), pages 1746-1753, March.
    5. Pizer, William A. & Yates, Andrew J., 2015. "Terminating links between emission trading programs," Journal of Environmental Economics and Management, Elsevier, vol. 71(C), pages 142-159.
    6. Baran Doda & Luca Taschini, 2017. "Carbon Dating: When Is It Beneficial to Link ETSs?," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(3), pages 701-730.
    7. Simon Quemin & Christian de Perthuis, 2017. "Transitional Restricted Linkage between Emissions Trading Schemes," Policy Papers 2017.09, FAERE - French Association of Environmental and Resource Economists.
    8. Wood, Peter John, 2010. "Climate Change and Game Theory," Research Reports 95061, Australian National University, Environmental Economics Research Hub.
    9. Springmann, Marco, 2012. "A look inwards: Carbon tariffs versus internal improvements in emissions-trading systems," Energy Economics, Elsevier, vol. 34(S2), pages 228-239.
    10. Zhang, Xu & Qi, Tian-yu & Ou, Xun-min & Zhang, Xi-liang, 2017. "The role of multi-region integrated emissions trading scheme: A computable general equilibrium analysis," Applied Energy, Elsevier, vol. 185(P2), pages 1860-1868.
    11. Wood, Peter John, 2010. "Climate Change and Game Theory: a Mathematical Survey," Working Papers 249379, Australian National University, Centre for Climate Economics & Policy.
    12. L. Richard Little & Brenda B. Lin, 2017. "A decision analysis approach to climate adaptation: a structured method to consider multiple options," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(1), pages 15-28, January.
    13. Spash, Clive L. & Lo, Alex Y., 2011. "Australia's Carbon Tax: A Sheep in Wolf's Clothing?," MPRA Paper 33997, University Library of Munich, Germany.
    14. Koesler, Simon & Achtnicht, Martin & Köhler, Jonathan, 2015. "Course set for a cap? A case study among ship operators on a maritime ETS," Transport Policy, Elsevier, vol. 37(C), pages 20-30.
    15. Zakeri, Atefe & Dehghanian, Farzad & Fahimnia, Behnam & Sarkis, Joseph, 2015. "Carbon pricing versus emissions trading: A supply chain planning perspective," International Journal of Production Economics, Elsevier, vol. 164(C), pages 197-205.
    16. Frank Jotzo & Steve Hatfield-Dodds, 2011. "Price Floors in Emissions Trading to Reduce Policy Related Investment Risks: an Australian View," CCEP Working Papers 1105, Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University.

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