Abstract:
This chapter will consider recent regulatory responses to climate change in Australia with a view to providing guidance for policy makers in the East Asia region. In particular, it will review the reasoning behind the choice of emissions trading ahead of other market-based instruments such as behavior modifying taxes and tax expenditure reform. It will firstly describe the key international agreements on climate change. Secondly, it will provide a review of the key literature in support of market -based instruments including the relative merits of carbon taxes and emissions trading. Thirdly, the chapter will review the history of regulatory responses in Australia at both Federal and State government levels, leading up to and including the proposed Australian emissions trading scheme, known as the Carbon Pollution Reduction Scheme (the CPRS). Fourthly, the chapter will review features of the underlying taxation system which constitute significant "barriers to change" which are very likely to undennine the intended objectives of the CPRS. The chapter concludes with some suggestions for emerging economies of the East Asia region on how taxation rules can be integrated with climate change objectives.
