Productivity Commission Report on Carbon Emissions Policies in Key Economies

8th June 2011

The Productivity Commission today released its report on Carbon Emissions Policies in Key Economies. The report follows a request from the Australian Government for the Commission to undertake a research study into effective carbon prices that result from emissions-reduction policies in Australia and other key economies.  The report is one of several studies commissioned to assist Government and the Multi Party Climate Change Commission to consider issues associated with the introduction of a carbon price.

The purpose of this report was to provide an indication of Australia’s carbon pollution mitigation efforts compared to those of other countries. The Commission found that while the range of measures implemented meant that an equivalent single price on emissions could not be established, all policies impose costs that must be paid. As such, the Commission interpreted ‘effective’ carbon prices broadly to mean the cost of reducing emissions. The study should therefore be seen as a snapshot of the current cost and cost effectiveness of major carbon abatement policies.
The report identified more than 1000 carbon policy measures in the 9 countries surveyed. Several countries have established emissions trading schemes, and “all have in place a range of more limited, less direct measures, such as mandatory renewable energy targets, feed-in tariffs, energy-efficiency measures and capital subsidies for constructing or installing sources of renewable energy.”
The report found that emissions trading schemes are more cost effective than other measures, while policies that encourage small-scale renewable generation (eg feed-in tariffs) and biofuels have been expensive and not resulted in significant levels of abatement.              
Other than Australia, the countries included in the study are: China, Germany, India, Japan, New Zealand, South Korea, the United Kingdom and the United States.
The report can be accessed here.

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