Australia's emissions reduction policy options: Direct Action versus Emissions Trading Schemes

The newly elected Australian government recently legislated to use its Emissions Reduction Fund to subsidise businesses directly to implement strategies to reduce their greenhouse gas emissions. This policy is known as Direct Action. Direct Action is quite different in operation from an emissions trading scheme (ETS),  the policy the previous Labour government had been moving towards. What would be the differing impacts of these opposing policies on businesses, households, government revenues and the quantum of emissions reduction likely to be achieved? To date there are no serious economic analyses of the likely impacts. This project aims to use a multicountry, multisector economic modelling framework to project the impacts of the ETS and Direct Action approaches to  emissions reduction in Australia and to make some policy recommendations.

Due for completion in 2015

Funded by: University of New England Research Seed Grants

Contact: Mahinda Siriwardana, Xianming (Sam) Meng, or Judith McNeill