Which countries have set a carbon price, and is Australia leading the way or catching up?
Our trading partners, including the European Union, China, Korea and Japan, and a number of states of the US, are pricing or are moving to price carbon. They are doing this by various policy measures including regulation, subsidies on consumption of non-carbon-polluting technologies such as solar PV panels, subsidies on the production of non-carbon-polluting technologies, subsidies on research and development related to green technologies, and pricing schemes such as a cap-and-trade emissions trading scheme (ETS).
For Australian industry to remain competitive, we also need to be pricing carbon. The real question is: what type of policy will move the carbon price in Australia as quickly as possible to international carbon price levels? This is a critical question because Australia risks getting left behind in the international marketplace unless our carbon price quickly moves to international price levels.
Many countries have used a combination of the above policies. The real question for each country, including Australia, is what is the appropriate policy to move the country into a world of new, non-carbon-polluting technologies, and keep the country competitive in an environment in which all of our major trading partners are pricing carbon.
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