Grandfathering and Greenhouse: The Role of Compensation and Adjustment Assistance in the Introduction of a Carbon Emissions Trading Scheme for Australia

Flavio Menezes, John Quiggin and Liam Wagner

No 3-2009, Energy Economics and Management Group Working Papers from School of Economics, University of Queensland, Australia

Abstract: The terms "grandfather clause" and "grandfathering" describe elements of a policy programme 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 programmes are preferable to policies based on the free issue of emission permits. The suggestion that owners of capital assets should be compensated for changes in government policy that reduce the expected flow of income from those assets represents a radical, and undesirable, policy innovation.

Keywords: grandfathering; emissions trading; compensation; adjustment assistance; Environmental Economics and Policy; Resource /Energy Economics and Policy (search for similar items in EconPapers)
JEL-codes: Q40 Q52 Q58 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Published in Economic Papers: A journal of applied economics and policy, vol. 28 (2009), no.2, pages. 82-92

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Related works:
Journal Article: Grandfathering and Greenhouse: The Role of Compensation and Adjustment Assistance in the Introduction of a Carbon Emissions Trading Scheme for Australia (2009)
Working Paper: Grandfathering and greenhouse: the role of compensation and adjustment assistance in the introduction of a carbon emissions trading scheme for Australia (2009)
Working Paper: Grandfathering and greenhouse: the role of compensation and adjustment assistance in the introduction of a carbon emissions trading scheme for Australia (2008)
Working Paper: Grandfathering and greenhouse: the role of compensation and adjustment assistance in the introduction of a carbon emissions trading scheme for Australia (2008)
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