Instruments for Climate Policy

Instruments for Climate Policy

Limited versus Unlimited Flexibility

New Horizons in Environmental Economics series

Edited by Johan Albrecht

Instruments for Climate Policy focuses on economic and political aspects related to the recent proposals and the debate on limits in flexibility, and discusses EU and US perspectives on climate policy instruments and strategies. This is followed by chapters on economic efficiency and the use of flexible instruments as well as contributions to the debate on ‘when flexibility’, on the arguments behind the EU ceilings proposal and on voluntary approaches to climate policy. One of the main conclusions reached with respect to proposals for limiting flexibility is the need to evaluate simultaneously their economic, ecological and international political consequences. The authors include both important policymakers and leading academics in the area.

Chapter 8: The Australian Greenhouse Challenge: Lessons learned and future prospects for voluntary approaches in climate policy

Rory Sullivan and Robin Ormerod

Subjects: economics and finance, environmental economics, environment, climate change, environmental economics


8. The Australian Greenhouse Challenge: Lessons learned and future prospects for voluntary approaches in climate policy Rory Sullivan and Robin Ormerod 1. INTRODUCTION Although Australia contributes only 1.4 per cent of the total global greenhouse gas emissions, it has the second highest emissions of greenhouse gases on a per capita basis (behind the USA). This is a consequence of Australia’s dependence on coal for electricity, high land-clearing rates and energy-intensive processing industries (Commonwealth of Australia, 1997, pp. 11–22). Under the Kyoto Protocol, developed countries and others with ‘economies in transition’ have agreed to reduce their overall emissions of six greenhouse gases to at least 5 per cent below 1990 levels between 2008 and 2012. Australia is one of a few countries with an increased emission limit being required to take measures to cap its greenhouse gas emissions at 108 per cent of its 1990 emissions, to be achieved on an annual basis over the five years from 2008 to 2012. From the most recent National Greenhouse Gas Inventory data (AGO, 2000a, p. A-3), Australia’s net annual greenhouse gas emissions in 1998 totalled 455.9 million tonnes of carbon dioxide equivalent (mt CO2e), representing an increase of 16.9 per cent over the 1990 levels of 389.8 mt CO2e. Emissions from stationary sources, which include electricity generation, petroleum refining, gas processing, solid fuel manufacturing, manufacturing industries and construction, contribute 56.8 per cent of total national emissions; transport contributes 15.9 per cent and agriculture contributes 20.2 per cent. Forestry and other removals...

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