Early Experience and Future Prospects
Edited by John Quiggin, David Adamson and Daniel Quiggin
Climate change is arguably the greatest threat to long-term social, environmental and economic growth that the world needs to deal with. However, the complexity and global nature of the problem has proved a substantial obstacle to effective action. The inherent complexity of the problem has been exacerbated by misinformation and rent-seeking. Despite this, economists have reached broad agreement that the appropriate response must be based on the imposition of a price on emissions of carbon dioxide, sufficient to induce substantial reductions in national and global emissions over coming decades. In 2012, Australia introduced a carbon price. The proposal involved the creation of a system of emissions permits, initially issued at a fixed price. After 2015, it is proposed that the permits should be tradable, and that permits purchased from the European Union's Emissions Trading Scheme should be usable in Australia. Although criticism of the carbon price was replete with predictions of economic disaster (the Leader of the Opposition described it as a 'wrecking ball' that would destroy the Australian economy), there was little immediate evidence on the economic impact of the price. Carbon dioxide emissions declined, but, as always, there were a range of factors involved. With the carbon price a reality, it seemed desirable to examine its initial impact. The Risk and Sustainable Management Group (RSMG) therefore organized a two-day workshop to examine a wide range of issues relating to early experience with the carbon price.