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The logic of collective action and Australia’s climate policy*

The logic of collective action and Australia’s climate policy* We analyse the long‐term efficiency of the emissions target and of the provisions to reduce carbon leakage in the Australian Government’s Carbon Pollution Reduction Scheme, as proposed in March 2009, and the nature and likely cause of changes to these features in the previous year. The target range of 5–15 per cent cuts in national emission entitlements during 2000–2020 was weak, in that on balance it is too low to minimise Australia’s long‐term mitigation costs. The free allocation of output‐linked, tradable emissions permits to emissions‐intensive, trade‐exposed (EITE) sectors was much higher than proposed earlier, or shown to be needed to deal with carbon leakage. It plausibly means that EITE emissions can rise by 13 per cent during 2010–2020, while non‐EITE sectors must cut emissions by 34–51 per cent (or make equivalent permit imports) to meet the national targets proposed, far from a cost‐effective outcome. The weak targets and excessive EITE assistance illustrate the efficiency‐damaging power of collective action by the ‘carbon lobby’. Resisting this requires new national or international institutions to assess lobby claims impartially, and more government publicity about the true economic importance of carbon‐intensive sectors. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Australian Journal of Agricultural Resource Economics Wiley

The logic of collective action and Australia’s climate policy*

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References (37)

Publisher
Wiley
Copyright
Copyright © 2010 Wiley Subscription Services, Inc., A Wiley Company
ISSN
1364-985X
eISSN
1467-8489
DOI
10.1111/j.1467-8489.2010.00489.x
Publisher site
See Article on Publisher Site

Abstract

We analyse the long‐term efficiency of the emissions target and of the provisions to reduce carbon leakage in the Australian Government’s Carbon Pollution Reduction Scheme, as proposed in March 2009, and the nature and likely cause of changes to these features in the previous year. The target range of 5–15 per cent cuts in national emission entitlements during 2000–2020 was weak, in that on balance it is too low to minimise Australia’s long‐term mitigation costs. The free allocation of output‐linked, tradable emissions permits to emissions‐intensive, trade‐exposed (EITE) sectors was much higher than proposed earlier, or shown to be needed to deal with carbon leakage. It plausibly means that EITE emissions can rise by 13 per cent during 2010–2020, while non‐EITE sectors must cut emissions by 34–51 per cent (or make equivalent permit imports) to meet the national targets proposed, far from a cost‐effective outcome. The weak targets and excessive EITE assistance illustrate the efficiency‐damaging power of collective action by the ‘carbon lobby’. Resisting this requires new national or international institutions to assess lobby claims impartially, and more government publicity about the true economic importance of carbon‐intensive sectors.

Journal

The Australian Journal of Agricultural Resource Economics – Wiley

Published: Apr 1, 2010

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