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Low hanging fruit in Australia's climate policy

Author

Listed:
  • Frank Jotzo
  • Warwick J. McKibbin

Abstract

Australia has a history of fragmented and politically contested climate policy, and current climate policy is both piecemeal and limited in scope and ambition. Ample opportunities exist to reduce emissions through the more broad-based application of policy. This paper outlines six areas where climate policy in Australia could achieve emissions reductions at low cost: pricing emissions in industry through a modification and broadening of the existing Safeguards Mechanism; investment in assisting the transformation of the electricity grid to very high shares of renewables; a mixture of innovation support, and targeted incentives and regulatory standards in specific sectors and activities; an effective green infrastructure program to stimulate demand and raise productivity in the medium term; a community focussed structural adjustment fund that would enable disproportionately impacted communities to adapt reality of the global transition to net-zero emissions by 2050; and removing impediments to the emergence of new renewable energy-based export industries to take the place of coal and gas exports.

Suggested Citation

  • Frank Jotzo & Warwick J. McKibbin, 2021. "Low hanging fruit in Australia's climate policy," CAMA Working Papers 2021-78, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2021-78
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    File URL: https://cama.crawford.anu.edu.au/sites/default/files/publication/cama_crawford_anu_edu_au/2021-09/78_2021_jotzo_mckibbin_0.pdf
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    More about this item

    Keywords

    climate change policy; policy packages; Australia;
    All these keywords.

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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