Australia's Carbon Policy – A Retreat from Core Principles?

Successive Australian governments have been committed to the introduction of an emissions trading scheme (ETS) designed to mitigate climate change. In 2010, the Australian government announced its intention to propose a temporary carbon pricing scheme, and also, set up the Multi-Party Climate Change Committee (the Committee) consisting of members of the federal government and senators. The Committee issued eleven policy principles designed to provide a consistent basis for the deliberations on a carbon price. The Committee also specified that these principles should direct the development of any carbon price mechanisms. However, even at first sight, the proposed legislation does not seem to reflect these criteria adequately. This paper discusses the major characteristics of the proposed carbon pricing scheme and its potential capacity to address the principles (criteria) established by the Committee.