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Should Households and Businesses Receive Compensation for the Costs of Greenhouse Gas Emissions?

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  • John Freebairn

Abstract

Arguments for, and then the form and level of, compensation of households and businesses for the additional costs of an emissions trading scheme to lower greenhouse gas (GHG) emissions are evaluated. With most of the costs passed forward to households as higher consumer prices, a sequential set of direct income transfers to all households is proposed to meet equity and macroeconomic stability objectives. In the event that Australia proceeds with a scheme before some of the other global polluters, to avoid carbon leakage and unnecessary industrial restructuring a consumption base system of taxing the GHG component of imports and compensating the GHG component of exports is proposed.

Suggested Citation

  • John Freebairn, 2009. "Should Households and Businesses Receive Compensation for the Costs of Greenhouse Gas Emissions?," Department of Economics - Working Papers Series 1071, The University of Melbourne.
    • Handle: RePEc:mlb:wpaper:1071
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    File URL: http://fbe.unimelb.edu.au/__data/assets/pdf_file/0008/801089/1071.pdf
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    References listed on IDEAS

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    8. John Freebairn, 2008. "Some Sectoral and Global Distributional Issues in Greenhouse Gas Policy Design," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 15(1), pages 13-28.
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    More about this item

    Keywords

    Macroeconomics: Consumption; Saving; Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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