THE LOGIC OF COLLECTIVE ACTION AND AUSTRALIA'S CLIMATE POLICY

John Pezzey, Salim Mazouz and Frank Jotzo

No 59577, 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia from Australian Agricultural and Resource Economics Society

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% 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 emission 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% during 2010- 2020, while non-EITE sectors must cut emissions by 34-51% (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.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 19
Date: 2010
New Economics Papers: this item is included in nep-ene and nep-env
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: The logic of collective action and Australia’s climate policy (2010)
Journal Article: The logic of collective action and Australia's climate policy * (2010)
Working Paper: The logic of collective action and Australia’s Climate Policy (2009)
Working Paper: The logic of collective action and Australia’s Climate Policy (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare10:59577

DOI: 10.22004/ag.econ.59577

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