Carbon Pricing

Carbon Pricing

Early Experience and Future Prospects

Edited by John Quiggin, David Adamson and Daniel Quiggin

In 2012, Australia took the major step of introducing a carbon price, involving the creation of a system of emissions permits initially issued at a fixed price. Carbon Pricing brings together experts instrumental in the development, and operation, of Australia’s carbon policy who have played a significant role in the broader debate over climate change policy. Together they have achieved an in-depth analysis of Australia’s policy stance on pricing carbon and its implications for the wider economy.

Chapter 9: Agricultural adaptation: observations and insights

Thilak Mallawaarachchi and Michael Harris

Subjects: economics and finance, environmental economics, environment, climate change, environmental economics, environmental politics and policy, valuation, politics and public policy, environmental politics and policy


It has been recognized for some time that the benefits of climate change mitigation efforts will come too late to avoid substantial impacts from expected changes in the climate. It has also been acknowledged that scientific uncertainties prevent a firm understanding of how the effects of climate change will be distributed across sectors and locations, as well as through time (Garnaut, 2008; Tol, 2012). In this setting, it will be essential for farmers (and others) to adapt to changes in agronomic conditions that they face over time. Adaptation will be undertaken both in anticipation of change and in response to changes being experienced and the quantum, type and timing of adaptation responses by different firms and individuals will vary depending on their perception of change and its consequences. A key issue in understanding the role of public policy around adaptation is whether adaptation is likely to be insufficient or ineffective if left to autonomous adjustment led by market forces alone. It is well known that agriculture is highly exposed to climate variation and climate change presents a significant threat to improving agricultural productivity. It is also known that Australian agriculture has been engaged in an ongoing process of adaptation and evolution since European settlement. The sector is characterized by many comparatively small and heterogeneous producers, interacting directly with prevailing climatic and biological conditions. The sector continually confronts risk associated with climate and biology (production risk) and market volatility (market risk).

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