Australia: domestic politics, diffusion and emissions trading design as a technical and political project

In Jørgen Wettestad and Lars Gulbrandsen (eds), The Evolution of Carbon Markets. Design and Diffusion. London, Routledge, 2018, pp. 124-144

Australia has a long history of designing emissions trading schemes but a far patchier one in introducing and maintaining policies for pricing greenhouse gas emissions. Early work on an ETS began shortly after the Kyoto Protocol negotiations and continued throughout the early 2000s, albeit somewhat disjointedly as different groups vied for leadership. It took until 2009, however, before the first proposal for a national ETS, the Carbon Pollution Reduction Scheme (CPRS), was debated by the Australian parliament, and it was not until 2011 that the Carbon Pricing Mechanism (CPM) was introduced by the Labour government as part of the Clean Energy Future Package. This policy proved to be short-lived, and the CPM was repealed in 2014 by the Liberal–National Coalition (hereafter Coalition) government. This chapter analyses the Australian process of adopting and designing the CPRS and the CPM. It shows that the combination of external factors - in particular the Kyoto Protocol - strongly contributed to the adoption by the Labour Government. The design of the two schemes, however, was strongly shaped by scrutiny of other schemes available, assessing the approproateness of various elements for the Australian context. These schemes included the EU ETS, the NZ ETS, RGGI and a domestic scheme.