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Carbon Pricing: The Real Dirt on Tax Vs. Permits
The purpose of putting a price on carbon is to force polluters to change
their dirty ways, but the federal government's plan to delay an
emissions trading scheme (ETS) in favour of a carbon tax ultimately may
be more detrimental for the environment. Price volatility under an ETS
is inducing fear among heavy emitters. However, uncertainty over carbon
pricing is also the key driver for power plant owners to invest in
cleaner technology, new research from the Australian School of Business
reveals. And, while policymakers' intention of dampening volatility with
an upfront tax seems more assuring, there may be a catch – it looks
likely to be more punitive for big polluters.
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By theBoxThe purpose of putting a price on carbon is to force polluters to change
their dirty ways, but the federal government's plan to delay an
emissions trading scheme (ETS) in favour of a carbon tax ultimately may
be more detrimental for the environment. Price volatility under an ETS
is inducing fear among heavy emitters. However, uncertainty over carbon
pricing is also the key driver for power plant owners to invest in
cleaner technology, new research from the Australian School of Business
reveals. And, while policymakers' intention of dampening volatility with
an upfront tax seems more assuring, there may be a catch – it looks
likely to be more punitive for big polluters.
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