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Fiddling while carbon burns: why climate policy needs pervasive emission pricing as well as technology promotion


  • John C.V. Pezzey

    () (Centre for Resource and Environmental Studies, Australian National University)

  • Frank Jotzo

    () (Research School of Pacific and Asian Studies, Australian National University)

  • John Quiggin

    () (Department of Economics, University of Queensland)


Effective climate policy requires global emissions of greenhouse gases to be cut drastically, which in energy sectors can be achieved by lower emissions supply technologies, greater energy use efficiency, and substitution in demand. For policy to be efficient requires fairly uniform, pervasive emission pricing from taxes, permit trading, or hybrid combinations of the two, as well as significant government support for low-emission technologies. We compare the kind of technology-focused climate policies currently adopted by Australia and the USA, the ‘Asia- Pacific Partnership on Clean Development and Climate’ (AP6), against this ideal policy yardstick. We find that they omit the need for emission pricing to achieve abatement effectively and efficiently; that they over-prescribe which abatement actions should be used most; that they make unrealistic assumptions about how much progress can be achieved by voluntarism and cooperation, in the absence of either adequate funding or mandatory policies; and that they unjustifiably contrast technology-focused policy and the Kyoto Protocol approach as the only two policies worth considering, and thus ignore other important options.

Suggested Citation

  • John C.V. Pezzey & Frank Jotzo & John Quiggin, 2006. "Fiddling while carbon burns: why climate policy needs pervasive emission pricing as well as technology promotion," Climate Change Working Papers WPC06_1, Risk and Sustainable Management Group, University of Queensland.
  • Handle: RePEc:rsm:climte:c06_1

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    Cited by:

    1. Pezzey, John C.V. & Mazouz, Salim & Jotzo, Frank, 2010. "The logic of collective action and Australia’s climate policy," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(2), June.
    2. Sylvia Karlsson-Vinkhuyzen & Harro Asselt, 2009. "Introduction: exploring and explaining the Asia-Pacific Partnership on Clean Development and Climate," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 9(3), pages 195-211, August.
    3. Harro Asselt & Norichika Kanie & Masahiko Iguchi, 2009. "Japan’s position in international climate policy: navigating between Kyoto and the APP," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 9(3), pages 319-336, August.
    4. Frank Jotzo, 2007. "Climate policy in Australia and globally: where to and how?," Economics and Environment Network Working Papers 0703, Australian National University, Economics and Environment Network.
    5. Armbruster, Walter J., 2009. "Challenges and Issues in the Next Decade: A Proactive Role for Agricultural and Resource Economists," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 38(1), April.
    6. Mathews, John, 2007. "Seven steps to curb global warming," Energy Policy, Elsevier, vol. 35(8), pages 4247-4259, August.
    7. Warwick J. McKibbin, 2007. "From National to International Climate Change Policy," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 40(4), pages 410-420, December.
    8. Sarah Hards, 2011. "Social Practice and the Evolution of Personal Environmental Values," Environmental Values, White Horse Press, vol. 20(1), pages 23-42, February.
    9. Helen King, 2008. "The challenges of finding efficient policy measures to reduce Australia'’s agricultural greenhouse gas emissions," Environmental Economics Research Hub Research Reports 0809, Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University.
    10. Pablo del Río, 2009. "Assessing the dynamic efficiency of internal mitigation projects. An evolutionary perspective," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 14(3), pages 203-213, March.
    11. King, Helen, 2008. "The challenges of finding efficient policy measures to reduce Australia’s agricultural Greenhouse gas emissions," Research Reports 94809, Australian National University, Environmental Economics Research Hub.

    More about this item


    greenhouse gas emissions; abatement; emission taxes; emissions trading; technology policy; innovation; Asia-Pacific Partnership; AP6;

    JEL classification:

    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General


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