Competitiveness and carbon pricing: border adjustments for greenhouse policies

Abstract

The Australian government has justified its failure to ratify the Kyoto Protocol by arguing that a cap on greenhouse gas emissions would have an adverse and disproportionate impact on the Australian economy because of our heavy dependence on emissions-intensive industries. Hugh Saddler, Frank Muller and Clara Cuevas propose a new approach which would preserve the competitiveness of energy-intensive producers while maintaining the carbon price signal within the domestic economy. A summary only is available online.