Australia now has a $70 ‘shadow price’ on carbon emissions. Why we won’t see a real price soon

18 Apr 2024

Professor John Quiggin writes for The Conversation

For those who have followed the tortuous path of Australian climate policy over recent decades, a recent report by the Australian Energy Market Commission of a “shadow price” of A$70 a tonne of carbon dioxide equivalent elicits some painful memories.

Multiple Coal Fossil Fuel Power Plant Smokestacks Emit Carbon Dioxide PollutionThe announcement is a reminder of what we lost in 2013 when the Abbott government scrapped the Carbon Pollution Reduction Scheme, better known as the “carbon tax” or the “carbon price”. It was the first time globally a carbon price had ever been introduced and subsequently removed.

In 2024, the shadow carbon price described by the commission is not a cost to be paid by carbon emitters. It’s an estimate of the marginal cost of meeting Australia’s emission cut target. The $70/tonne figure will be included when calculating the benefits and costs of rule changes.

Read the full article at The Conversation