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Rationales for Additional Climate Policy Instruments under a Carbon Price

Published online by Cambridge University Press:  01 January 2023

Paul Twomey
Paul Twomey*
Affiliation:
The University of New South Wales
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Abstract

The plan to introduce a carbon pricing scheme in Australia has focused attention on the future relevance and necessity of using other policy instruments to reduce carbon emissions. Significant reports, including the Wilkins Review and reports by the Productivity Commission, have argued using the standard neoclassical economics framework that once a carbon price is established, it should be (almost) the only instrument needed to tackle climate change mitigation in Australia. With a small number of exceptions for complementary instruments to address some market failures, the use of other climate policy instruments, it is argued, will result only in unnecessary duplication and potential distortions. The aim of this article is to show that there are, in fact, a significant number of rationales for implementing several climate policy instruments in combination with a carbon price, and we should not be too quick to dismiss certain climate policy instrument combinations.

Keywords

B5Q2Q5Climate change policycarbon pricingcomplementary policiespolicy mixespolicy interactionrenewable energy policy
Type
Symposium
Information
The Economic and Labour Relations Review , Volume 23 , Issue 1: Carbon Markets: Inherent Limitations and Complementary Policies , February 2012 , pp. 7 - 30
Copyright
Copyright © The Author(s) 2012

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