Publication

This paper discusses the wide recognition that one of the most effective ways to deal with climate change is to introduce a price signal to encourage efficient abatement of greenhouse gas emissions. The authors discuss two issues. First, there is the question of the timing of a price signal in particular whether the signal should be introduced early, or whether it would be more appropriate to first subsidize research and development before introducing a price signal. Second, there are concerns that in the absence of similar policies adopted by Australia's key trading partners, the country would suffer a loss of competitiveness that would impose unnecessary costs on the economy.