Abstract

This paper examines specific provisions of Australia’s carbon pricing mechanism created by the Clean Energy Act 2011 and measures foreshadowed in Australia’s climate change policy that intend to reduce the impact of carbon pricing on individuals and businesses alike. This paper considers three elements of carbon pricing in Australia. First, consideration is given to provisions contained in the Clean Energy Act itself, including concessions, exemptions and mechanisms intended to shield vulnerable economic sectors and particular businesses from the adverse economic effects of carbon pricing. Second, the paper examines complementary mechanisms created under the climate change policy as a whole, which provide compensation against price increases resulting from higher energy and manufacturing costs. Finally, the paper highlights the secondary dividends that could be facilitated by revenue raised from the sale of emission permits pursuant to the Act, including funding for the expansion of renewable and clean energies and energy efficiency measures.