The Australian carbon pricing experience: are there any lessons for Japan

Dabner, Justin (2013) The Australian carbon pricing experience: are there any lessons for Japan. Pacific and American Studies, 13. pp. 63-85.

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In 2010 the Japanese Government made substantial commitments to the reduction in greenhouse gas emissions. In particular it proposed a 25% reduction on 1990 levels by 2020 and an 80% reduction by 2050. At the forefront of this policy was to be an additional (carbon) tax on fossil fuels, strategies to promote renewable energy (in particular a feed-in tariff) and an emissions trading scheme. Notoriously there was to be greater reliance on nuclear energy.

Subsequent events conspired to derail these plans. The Fukushima power station disaster forced the Government to reconsider nuclear power. Continued global economic uncertainty, together with the damage to the economy caused by the March 2011 tsunami, resulted in the deferral of the introduction of the emissions trading scheme.

Meanwhile on July 1, 2012 the Australian Government introduced a hybrid carbon tax / emissions trading scheme putting it at the cutting edge of climate change response using fiscal measures. However the path to the introduction of this regime was not easy and its future is not assured. Whilst Australia had been active in negotiating the 1997 Kyoto Protocol, and an early signatory, during the subsequent decade the Liberal coalition Government refused to embrace a price on carbon, the centerpiece of the Protocol, even questioning the science on climate change. With the election of a Labor Government in 2007 the Kyoto Protocol was promptly ratified and an emissions trading scheme proposed. However the proposal met neither the expectations of environmentalists nor industry and in 2010 it was shelved upon failing to pass through Parliament for a third time. Although it seemed that the impetus had been lost, with the toppling of a Prime Minister later that year and a Federal election resulting in Labor forming a coalition with the Greens, momentum again swung in favour of an emissions trading scheme.

Meanwhile the Liberal coalition Opposition remains divided as to the approach it would adopt if it wins government in the elections scheduled for late 2013. Having dismissed one party leader for promoting an emissions trading scheme, the current policy of the party is that it would repeal the Government's scheme and focus on emissions reduction strategies requiring other than a fiscal response.

There may be political economy lessons for the rest of the world, including Japan, in how the carbon tax / emissions trading scheme was designed and implemented in Australia. This paper explores the developments in Australia. It is hoped that Japanese policy analysts might find the Australian experience informative.

Item ID: 32110
Item Type: Article (Research - C1)
ISSN: 1346-2989
Keywords: carbon pricing; tax law
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Date Deposited: 08 Apr 2014 23:33
FoR Codes: 18 LAW AND LEGAL STUDIES > 1801 Law > 180125 Taxation Law @ 100%
SEO Codes: 94 LAW, POLITICS AND COMMUNITY SERVICES > 9499 Other Law, Politics and Community Services > 949999 Law, Politics and Community Services not elsewhere classified @ 100%
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