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Australia's Carbon Tax: A Sheep in Wolf's Clothing?

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  • Clive L. Spash
  • Alex Y. Lo

Abstract

The Australian Government has produced a CO 2 -equivalent tax proposal with a difference: it is a short prelude to an emission trading scheme that will allow the increasing rate of emissions to continue, while being a net cost to the Treasury. That cost extends to allowing major emitters to make guaranteed windfall profits from pollution permits. The emission trading scheme suffers numerous problems, but the issues raised in this article show that taxes can also be watered down and made ineffectual through concessions. Taxpayers will get no assets from the billions of dollars to be spent buying-off the coal generators or other polluters. The scheme seeks to stimulate private investors to create an additional 12 per cent in renewable electricity generation by 2020. A really serious emissions reducing alternative would need to create a nationalised electricity sector with 100 per cent renewable energy within a decade. We explore the limitations of Australia's carbon tax plan which has now passed into law.

Suggested Citation

  • Clive L. Spash & Alex Y. Lo, 2012. "Australia's Carbon Tax: A Sheep in Wolf's Clothing?," The Economic and Labour Relations Review, , vol. 23(1), pages 67-85, February.
    • Handle: RePEc:sae:ecolab:v:23:y:2012:i:1:p:67-85
    DOI: 10.1177/103530461202300105
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    Cited by:

    1. Stefano Carattini & Andrea Baranzini & Philippe Thalmann & Frédéric Varone & Frank Vöhringer, 2017. "Green Taxes in a Post-Paris World: Are Millions of Nays Inevitable?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(1), pages 97-128, September.
    2. Hasanbeigi, Ali & Price, Lynn & Lin, Elina, 2012. "Emerging energy-efficiency and CO2 emission-reduction technologies for cement and concrete production: A technical review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(8), pages 6220-6238.
    3. Spash, Clive L., 2014. "The Politics of Researching Carbon Trading in Australia," SRE-Discussion Papers 2014/03, WU Vienna University of Economics and Business.
    4. Stefano Carattini & Simon Levin & Alessandro Tavoni, 2019. "Cooperation in the Climate Commons," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 13(2), pages 227-247.
    5. Barry Naughten, 2013. "Emissions Pricing, “Complementary Policies” and “Direct Action” in the Australian Electricity Supply Sector: Some Conditions for Cost-Effectiveness," Economic Papers, The Economic Society of Australia, vol. 32(4), pages 440-453, December.
    6. Lo, Alex Y. & Spash, Clive L., 2012. "How Green is your scheme? Greenhouse gas control the Australian way," Energy Policy, Elsevier, vol. 50(C), pages 150-153.
    7. Désirée Vandenberghe & Johan Albrecht, 2018. "Tackling the chronic disease burden: are there co-benefits from climate policy measures?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(9), pages 1259-1283, December.

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    More about this item

    Keywords

    Australia; carbon taxation; climate change; emission trading; greenhouse gases; regulation; renewable energy;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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