The Political Economy of Australia's Climate Change and Clean Energy Legislation: Lessons Learned
22 Pages Posted: 10 Jan 2013
Date Written: December 7, 2012
In November 2011, Australia adopted a highly innovative, ambitious and comprehensive climate change policy, the Clean Energy Legislative Package (CELP). This outcome was not self-evident.The CELP embeds an innovative carbon pricing mechanism in a comprehensive and highly generous package of complementary measures designed to increase its public acceptability, and environmental and economic efficiency. It is combined with progressive income tax cuts, increases in government transfer payments, and measures to shield emissions and trade-intensive industry and promote investment in renewable energy, energy efficiency and R&D. In addition, the package contains innovative governance mechanisms to shield it from the vagaries of the political cycle, and increase the political and administrative costs of dismantling it. In all, these measures increase the CELP’s chances of survival and provide an example of policy innovation for other countries to follow, keeping in mind their particular national circumstances.
Keywords: carbon pricing, public acceptance, Australian climate change policy, Clean Energy Legislative Package
JEL Classification: Q40, Q41, Q42
Suggested Citation: Suggested Citation