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Grandfathering and greenhouse: the role of compensation and adjustment assistance in the introduction of a carbon emissions trading scheme for Australia

  • Flavio Menezes

    ()

    (Department of Economics, University of Queensland)

  • John Quiggin

    ()

    (Department of Economics, University of Queensland)

  • Liam Wagner

    ()

    (Department of Economics, University of Queensland)

The terms ‘grandfather clause’ and ‘grandfathering’ describe elements of a policy program in which existing participants in an activity are protected from the impact of regulations, restrictions or charges applied to new entrants. In this paper, the role of grandfathering in the design of a carbon emissions trading scheme in Australia is assessed. It is argued that adjustment assistance policies such as those adopted in conjunction with previous microeconomic reform programs are preferable to policies based on the free issue of emissions permits.

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Paper provided by Risk and Sustainable Management Group, University of Queensland in its series Climate Change Working Papers with number WPC08_4.

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Date of creation: Feb 2008
Date of revision: 2008
Handle: RePEc:rsm:climte:c08_4
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