Carbon Pricing in Australia
Despite these similarities, Australia and Canada have followed different paths to generating policy responses to climate change. This Policy Brief provides a high-level overview and analysis of the economic and political drivers behind the development of Australia’s national policy on climate change, with a view to informing the development of Canada’s national policy.
- Australia and Canada are similar in many respects. They are both physically large, but sparsely populated countries, with resource-intensive and export-dependent economies. They are also both among the highest per capita greenhouse gas emitters in the world, and are both expected to be strongly affected by the physical and economic impacts of climate change.
- Despite these similarities, Australia and Canada have followed different paths to generating policy responses to climate change. Australia’s experience has been – despite vigorous political debate and changes in government – an incremental move toward carbon pricing at the national level. Canada, by contrast, has seen a number of plans proposed (but never forcefully implemented) by the national government, ranging from a “made in Canada” plan to the current one which emulates policy action in the United States. Canada’s federal approach to climate change policy has been characterized by its changing focus, uncertainty, and lack of commitment, and most significantly by a move from a preference for a market-based policy to a regulatory approach.
- Currently, Australia’s federal government has committed to putting in place a national carbon tax (by July 2012) that will transition to a national cap-and-trade system in a number of years. Canada’s current policy approach is to develop regulations that limit emissions from various sectors, notably transportation and coal-based electricity generation.
- This Policy Brief provides a high-level overview and analysis of the political, social and economic drivers behind the development of Australia’s national carbon pricing policy, with a view to informing the ongoing evolution of Canada’s national climate change policy.