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An Early Action Proposal with Known Costs: A Sensible and Realistic Option for Emissions Trading in Australia

Author

Listed:
  • Warwick J. McKibbin

    (Australian National University, Research School of Pacific and Asian Studies, Economics Division
    The Brookings Institution)

Abstract

In a number of papers, McKibbin and Wilcoxen (1997a,1997b,1999) have proposed to tackle rising greenhouse emissions by using an internationally coordinated system of domestic permit trading schemes with a fixed price rather than a fixed cap on greenhouse emissions. This paper argues that early action by Australia alone is difficult to justify. However, if early action on the Kyoto Protocol is deemed to be warranted then the McKibbin- Wilcoxen Proposal for a permit trading system with a low fixed permit price is a sensible early action policy for Australia, especially if many countries implement it at the same time and particularly if by implementing this proposal as an early action policy, it ultimately replaces the Kyoto Protocol. The paper sets out some important lessons from model research that are crucial for designing an early action policy for Australia. The paper also sets out the original McKibbin-Wilcoxen proposal as a more realistic approach to climate change than the Kyoto Protocol, as well as explaining how this proposal could work as an early action policy.

Suggested Citation

  • Warwick J. McKibbin, 1999. "An Early Action Proposal with Known Costs: A Sensible and Realistic Option for Emissions Trading in Australia," Economics and Environment Network Working Papers 9903, Australian National University, Economics and Environment Network.
  • Handle: RePEc:anu:eenwps:9903
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    File URL: http://www.msgpl.com.au/msgpl/download/aicicm991.pdf
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    References listed on IDEAS

    as
    1. Warwick J. McKibbin & Peter J. Wilcoxen, 1997. "A Better Way to Slow Global Climate Change," Economics and Environment Network Working Papers 9702, Australian National University, Economics and Environment Network.
    2. McKibbin, Warwick J. & Wilcoxen, Peter J., 1998. "The theoretical and empirical structure of the G-Cubed model," Economic Modelling, Elsevier, vol. 16(1), pages 123-148, January.
    3. Warwick J. McKibbin & Peter J. Wilcoxen, 1999. "Permit Trading Under the Kyoto Protocol and Beyond," Economics and Environment Network Working Papers 9902, Australian National University, Economics and Environment Network.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Alessandro Antimiani & Valeria Costantini & Chiara Martini & Luca Salvatici, 2011. "Cooperative and non-cooperative solutions to carbon leakage," Departmental Working Papers of Economics - University 'Roma Tre' 0136, Department of Economics - University Roma Tre.
    2. Helal Ahammad & Kenneth W. Clements & Ye Qiang, 2001. "The Economic Impact of Reducing Greenhouse Gas Emissions in WA," Economics Discussion / Working Papers 01-23, The University of Western Australia, Department of Economics.
    3. Ahammad, Helal & Clements, Kenneth W. & Ye, Qiang, 2001. "The regional economic impact of reducing greenhouse gas emissions: Western Australia," Resources Policy, Elsevier, vol. 27(4), pages 225-233, December.

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    More about this item

    Keywords

    tradable permits; Kyoto Protocol; Australia; climate change; policy;
    All these keywords.

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General

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