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Australia's carbon price

Nature Climate Change volume 2, pages 475–476 (2012)Cite this article

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Australia's carbon pricing mechanism leads the way with innovative design in price management and revenue recycling but could fall victim to partisan politics.

Climate-policy-laggard Australia has adopted a carbon pricing mechanism, with an initial price well above that prevailing in the European Union (EU)'s Emissions Trading Scheme (ETS). The policy features broad coverage of emissions, managed prices while phasing-in emissions trading, and politically calibrated recycling of permit revenue including income-tax cuts. These features could serve as a model for other countries' emerging carbon pricing schemes. But Australia's carbon pricing mechanism lacks bipartisan support, casting doubt over its political durability.

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Figure 1: EU allowance prices, CDM credit prices and Australia's carbon price.
Figure 2: Carbon pricing revenues and assistance payments.

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Authors and Affiliations

  1. Frank Jotzo is director of the Centre for Climate Economics and Policy, Crawford School of Public Policy, Australian National University, Canberra, Australian Capital Territory 0200, Australia. He advised the Garnaut Climate Change Review and provided advice on policy formulation,

    Frank Jotzo

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  1. Frank Jotzo
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Jotzo, F. Australia's carbon price. Nature Clim Change 2, 475–476 (2012). https://doi.org/10.1038/nclimate1607

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