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The Political Economy of Carbon Tax: International Practice and the Australian Model

Author

Listed:
  • Alex LO

    (Griffith School of Environment, Room 3.02, Building G31, Gold Coast campus, Griffith University, Queensland 4222, Australia)

Abstract

Carbon taxes create incentives for controlling greenhouse gases by putting a price on these emissions. In theory major carbon emitters would pay more under an effective carbon tax. In practice political considerations often dominate and consequently compromise effectiveness in emissions mitigation. Australia's carbon pricing mechanism is a recent example. It involves the use of a fixed-price instrument that resembles a carbon tax and will eventually turn into an emission trading scheme and enable price fluctuation. The policy design is however questionable for overcompensating big polluters and legitimizing the failure to curb emissions domestically. This paper offers a review of the development of carbon tax policies in various national contexts with a focus on Australia. Lessons from the international practices could provide a useful reference for China to advance its timely commitment to establishing a carbon pricing system.

Suggested Citation

  • Alex LO, 2013. "The Political Economy of Carbon Tax: International Practice and the Australian Model," Chinese Journal of Urban and Environmental Studies (CJUES), World Scientific Publishing Co. Pte. Ltd., vol. 1(01), pages 1-15.
  • Handle: RePEc:wsi:cjuesx:v:01:y:2013:i:01:n:s2345748113500073
    DOI: 10.1142/S2345748113500073
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    Cited by:

    1. Martin Rabbia, 2023. "Why did Argentina and Uruguay decide to pursue a carbon tax? Fiscal reforms and explicit carbon prices," Review of Policy Research, Policy Studies Organization, vol. 40(2), pages 230-259, March.
    2. Rakhmindyarto, Rakhmindyarto & Setyawan, Dhani, 2020. "Understanding the political challenges of introducing a carbon tax in Indonesia," MPRA Paper 111586, University Library of Munich, Germany, revised 02 Aug 2020.

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