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 10: Climate change and the precautionary principle

Simon Grant and John Quiggin

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


The problem of climate change has been described as 'a unique challenge for economics: it is the greatest and widest-ranging market failure ever seen' (Stern, 2007, p. i). Among the factors that make climate change a difficult problem, arguably the most important is uncertainty about the future course of climate change, and the effect of policies aimed at mitigating climate change. Although there is a large literature on the economic analysis of choice under uncertainty, many crucial issues are poorly understood by policymakers and the general public. In particular, uncertainty about climate change under 'business as usual' (BAU) policies is commonly seen as a reason for inaction. The widely used 'precautionary principle' suggests the contrary; early action is desirable. To resolve the conflict between these intuitions, it is necessary to consider in more detail the principles for choice in the face of environmental uncertainty and, particularly, the interpretation of the precautionary principle. The concept of the 'precautionary principle' has been the subject of vigorous debate. As with other contested concepts in environmental theory and policy, most notably that of 'sustainability,' the debate has proceeded in the absence of an agreed definition.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information