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January 2006 - present
Publications
Publications (159)
A rapid phase-out of unabated coal use is essential to limit global warming to below 2 °C. This review presents a comprehensive assessment of coal transitions in mitigation scenarios consistent with the Paris Agreement, using data from more than 1500 publicly available scenarios generated by more than 30 integrated assessment models. Our ensemble a...
The IPCC AR6 Synthesis Report is based on the three Working Group contributions to the AR6 as well as on the three Special Reports prepared in this assessment cycle.
The Working Group III (WG III) contribution to the IPCC’s Sixth Assessment Report (AR6) assesses literature on the scientific, technological, environmental, economic and social aspects of mitigation of climate change. The report reflects new findings in the relevant literature and builds on previous IPCC reports, including the WG III contribution t...
The global steel industry is entering a period of change unprecedented in its long history, and Australia, with the globally largest exports of both iron ore and metallurgical coal, must consider its position carefully. Steel production is critical to the support of global economic development and employs sophisticated, mature and highly-optimised...
China aims for net-zero carbon emissions by 2060 and an emission peak before 2030. This will reduce its consumption of coal for power generation and steelmaking. Simultaneously, China aims for improved energy security, primarily with expanded domestic coal production and transport infrastructure. We analyze effects of both these pressures on Chines...
Hydrogen produced using fossil fuel feedstocks causes greenhouse gas (GHG) emissions, even when carbon capture and storage (CCS) is used. By contrast, hydrogen produced using electrolysis and zero-emissions electricity does not create GHG emissions. Several countries advocating the use of ‘clean’ hydrogen put both technologies in the same category....
China aims for net-zero carbon emissions by 2060, and an emissions peak before 2030. This will reduce its consumption of coal for power generation and steel making. Simultaneously, China aims for improved energy security, primarily with expanded domestic coal production and transport infrastructure. Here, we analyze effects of both these pressures...
The objective implicit in the Paris Agreement, net-zero emissions around mid-century, has transformed the debate about heavy industry decarbonisation. Prior to Paris, the iron and steel, cement and concrete, chemicals, and other materials sectors were expected to reduce absolute emissions by perhaps half by 2050, through measures like energy effici...
Green hydrogen holds promise as a zero-carbon energy carrier if production costs fall low enough to achieve cost-competitiveness with alternatives. We specify reduced-form marginal effect relationships that capture the underlying dynamics of existing structural models of hydrogen production via electrolysis. These specifications provide the margina...
Hydrogen produced using fossil fuel feed stocks causes greenhouse gas (GHG) emissions, even when carbon capture and storage (CCS) is used. By contrast, hydrogen produced using electrolysis and zero-emissions electricity does not create GHG emissions. Several countries advocating the use of ‘clean’ hydrogen put both technologies in the same category...
Australia is a relative laggard on climate policy, amidst social and political fractures despite rising support for climate policy in opinion polls. In the 2019 Australian federal election, which was dubbed the ‘climate election’, the opposition campaigned on comparatively ambitious climate action but the government was returned on a status quo pol...
To date there has been an absence of cross-country empirical studies on the efficacy of carbon pricing. In this paper we present estimates of the contribution of carbon pricing to reducing national carbon dioxide (CO2) emissions from fuel combustion, using several econometric modelling approaches that control for other key policies and for structur...
Much hope has been placed on China’s decisions regarding low-carbon stimulus following COVID-19. Analysis of China’s recent Government Work Report suggests that while a repeat of recovery measures focused on high-emissions infrastructure following the 2008 global recession is not in the cards, a Chinese Green New Deal is not in sight either. Much i...
To counteract the recession caused by the measures to contain the coronavirus (COVID-19) pandemic, governments are implementing fiscal stimulus measures for economic recovery. In addition to keeping people in jobs and businesses afloat, public investment can improve productivity and economic growth prospects, resilience and quality of life for the...
This paper identifies critical lessons from the climate change experience to guide how communications and engagement on negative emissions can be conducted to encourage functional public and policy discourse. Negative emissions technologies present a significant opportunity for limiting climate change, and are likely to be necessary to keep warming...
We provide evidence that lowering the cost of accessing flood risk information increases public understanding of the risk of flood events. We exploit a pair of events to generate this conclusion: in July 2008, the Brisbane City Council released property level flood risk reports online, and, in 2011, Brisbane suffered a flood event. Using a longitud...
The Paris Agreement introduces long-term strategies as an instrument to inform progressively more ambitious emission reduction objectives, while holding development goals paramount in the context of national circumstances. In the lead up to the twenty-first Conference of the Parties, the Deep Decarbonization Pathways Project developed mid-century l...
Around one‐third of Australia's coal‐fired power stations closed between 2012 and 2017, with most of the remainder expected to close over coming decades. Current investment in generation capacity is primarily in the form of alternative power, especially wind and solar. In this paper, we conduct an event study to assess the local unemployment effect...
The shift away from coal is at the heart of the global low-carbon transition. Can governments of coal-producing countries help facilitate this transition and benefit from it? This paper analyses the case for coal taxes as supply-side climate policy implemented by large coal exporting countries. Coal taxes can reduce global carbon dioxide emissions...
China recently announced its national emissions trading scheme, advancing market-based approaches to cutting greenhouse gas emissions. Its evolution over coming years will determine whether it becomes an effective part of China's portfolio of climate policies.
Energy is needed for economic growth, and access to cheap, reliable energy is an essential development objective. Historically most incremental energy demand has been met through fossil fuels; however, in future that energy will have to be low carbon and ultimately zero‐carbon. Decarbonization can and needs to happen at varying speeds in all countr...
The electricity sector accounts for a large share of China's carbon dioxide emissions and of the economy-wide abatement potential. China's planned national emissions trading scheme would include electricity generation, as nearly all emissions trading schemes do. The critical difference is that in most existing carbon pricing systems the power secto...
China plans to launch its nationwide Emissions Trading Scheme (ETS) in 2017. Uncertainty in China’s future economic growth rate and its effect on underlying emissions may need to be addressed to ensure stability of the scheme. This article investigates an ex-post cap adjustment mechanism for China’s ETS. An applicable rule for indexation of emissio...
Constraining global average temperatures to 2 °C above pre-industrial levels will probably require global energy system emissions to be halved by 2050 and complete decarbonization by 2100. In the nationally orientated climate policy framework codified under the Paris Agreement, each nation must decide the scale and method of their emissions reducti...
Emissions from the production of iron and steel could constitute a significant share of a 2°C global emissions budget (around 19% under the IEA 2DS scenario). They need to be reduced, and this could be difficult under nationally based climate policy approaches. We compare a new set of nationally based modelling (the Deep Decarbonization Pathways Pr...
Mobilizing climate finance for developing countries is crucial for achieving a fair and effective global climate regime. To date, developed countries retain wide discretion over their national contributions. We explore how different degrees of international coordination may influence the fairness of the global financing effort, and we present quant...
In this paper we propose a market mechanism for regulated exit of highly emissions intensive power stations from the electricity grid. The starting point is that there is surplus capacity in coal fired power generation in Australia. In the absence of a carbon price signal, black coal generation capacity may leave the market instead of high emitting...
The book summarizes findings of research of 16 country teams on deep decarbonization pathways, aiming at limiting the global warming by 2 degrees Celsius.
This supplementary material contains case studies presenting specific aspects of the DDPP
country pathways. They illustrate and complement the cross-cutting analysis included in the
2015 DDPP synthesis report
This chapter examines the effects of combining an international cap-and-trade scheme with national carbon taxes. We consider a two-country stochastic partial equilibrium model with log-normally distributed uncertainty. The situation is analogous to the situation where European countries impose national carbon taxes in addition to the EU emissions t...
Empirical and theoretical perspectives on the first two phases of the European Emissions Trading Scheme, the largest cap-and-trade market established so far.
Emissions trading schemes figure prominently among policy instruments used to tackle the problem of climate change, and the European Union Emissions Trading Scheme (EU ETS), begun in 2005, is...
Mobilizing climate finance for developing countries is crucial for achieving a fair and effective global climate regime. To date developed countries retain wide discretion over their national contributions. We explore how different degrees of international coordination may influence the fairness of the global financing effort. We present quantitati...
This paper examines the effects of combining an international cap-and-trade
scheme with national carbon taxes. We consider a two-country stochastic partial equilibrium
model with log-normally distributed uncertainty. The situation is analogous to the situation
where European countries impose national carbon taxes in addition to the EU emissions
tra...
In this paper we investigate the introduction of an export tax on steam coal levied by an individual country (Australia), or a group of major exporting countries. The policy motivation would be twofold: generating tax revenues against the background of improved terms-of-trade, while CO2 emissions are reduced. We construct and numerically apply a tw...
China has implemented emissions trading schemes in seven cities and provinces, and is planning a national cap-and-trade scheme. The seven pilot schemes show marked differences in design and operate in very diverse economic circumstances. Challenges encountered in the pilot schemes include the risk of over-allocation of emissions permits, unpredicta...
We review the literature on the economics of climate change with a focus on the evolution of the literature from some of the early classic papers to the latest contributions. We divide the paper into three main sections: trends in greenhouse gas emissions, mitigation, and adaptation.
Any limit on future global warming is associated with a quota on cumulative global CO2 emissions. We translate this global carbon quota to regional and national scales, on a spectrum of sharing principles that extends from continuation of the present distribution of emissions to an equal per-capita distribution of cumulative emissions. A blend of t...
China needs to reduce its carbon emissions if global climate change mitigation is to succeed. Conventional economic analysis views cutting emissions as a cost, creating a collective action problem. However, decarbonization can improve productivity and provide co-benefits that accord with multiple national policy objectives. We track China's progres...
This report stated the key concepts of decarbonization of 15 leading economies aiming at limiting global warming by 2 degrees Celsius. The report was presented to UN Secretary-General Ban Ki-moon in support of the UN Climate Leaders’ Summit in New York on September 23, 2014 and the UNFCCC COP21, where the historic Paris Climate Agreement was signed...
World economic activity is a cause of climate change and climate change has an impact on economic activity. Adaptation to climate change can occur locally, but action to reduce the extent of climate change requires global cooperation or at least coordination.
Covering all aspects of the problem, this collection contains both classic and recent key...
The 2014 report and the associated Technical Report elaborate on the work undertaken to prepare the Australian chapter of the DDPP 2014 report. They provide additional Australian context and technical detail about the modelling and analysis. The accompanying Technical Report provides more information on the modelling framework, assumptions and resu...
Australia’s carbon price has been in operation for two years. The electricity sector accounts for the majority of emissions covered under the scheme. This paper examines the impact of the carbon price on the electricity sector between 1 July 2012 and 30 June 2014, focusing on the National Electricity Market (NEM). Over this period, electricity dema...
This paper examines the effects of combining an international cap-and-trade scheme with national carbon taxes. We consider a two-country stochastic partial equilibrium model with log-normally distributed uncertainty. The situation is analogous to the situation where European countries impose national carbon taxes in addition to the EU emissions tra...
The political opportunities for implementing a carbon tax high enough to
induce large emission cuts will be better if at first the tax is charged
on the difference between emissions and fixed thresholds, rather than on
all emissions as is now practised.
Indonesia has undergone far-reaching political, administrative and fiscal decentralization over the last decade. Significant powers now rest with the district level including the management of natural resources and the environment. A large share of state revenue goes to district governments. Deforestation has been a part and parcel of Indonesia's e...
This paper examines the linking of price-based and quantity-based provision of a public good by two parties in the example of pollution control under a global quantity constraint, using a stochastic partial-equilibrium model. One country chooses a price-based instrument (tax) and trades with another that lets its emissions price adjust. The expecte...
Australia's carbon‐pricing policy remains in doubt due to a lack of bipartisan political support. A survey of Australian‐based carbon‐pricing experts demonstrates profound policy uncertainty: 40 per cent of respondents expect the current carbon‐pricing mechanism to be repealed, but 80 per cent expect that there will be a carbon price in 2020. The f...
We give empirical welfare results for global greenhouse gas emission abatement, using the first multi-party model to include both tax-versus-trading under uncertainties, and revenue recycling. Including multiple, independent parties greatly reduces the welfare advantage of an emissions tax over emissions (permit) trading in handling abatement-cost...
The inaugural Australia Carbon Pricing Survey elicits expectations about the future of carbon pricing from experts working for Australia's largest greenhouse gas emitting companies, the carbon finance and investment industry and selected other experts. The survey indicates pervasive uncertainty about the future of Australia's carbon pricing scheme,...
Australia's carbon pricing mechanism leads the way with innovative
design in price management and revenue recycling but could fall victim
to partisan politics.
In recent years, renewable energy technologies have been advocated in Small Island Developing States (SIDS) in the Pacific as a risk-mitigation measure against oil price volatility. Despite this, there have been no attempts to measure the impact of renewable technologies on financial risk in these countries. This paper develops and applies a stocha...
Following the Copenhagen climate Accord, developed and developing countries have pledged to cut their greenhouse gas emissions, emissions intensity or emissions relative to baseline. This analysis puts the targets for the major countries on a common footing, and compares them across different metrics. Targeted changes in absolute emissions differ m...
This paper identifies principles for carbon pricing that could attract a broad based and durable societal consensus in Australia. It applies these principles to a phased carbon pricing architecture as put forward by Australia's Multi-Party Committee on Climate Change, namely a government determined (fixed) carbon price transitioning to emissions tr...
A price floor in Australia’s planned emissions trading scheme could help Australia’s transition to a lower-carbon trajectory by reducing the downside risk for investments in low-emissions assets. A price floor could be of particular benefit in the early phases of emissions trading following a fixed price period, in the context of evolving internati...
The merits of floor prices in emissions trading schemes (ETS) depend on the problem addressed. Traditional hybrid approaches emphasise automatic response to lower than anticipated abatement costs, but we find adjusting emissions targets over time is the better way to deal with this in the context of climate policy. We find, however, that a price fl...
Today the idea that climate change requires a gradual and moderate response no longer commands consensus support among economists. A more demanding approach is gaining ground. This paper traces the changes in economic thinking concerning the case for action on climate change, through an analysis of the work of three eminent economists: William Nord...
Indonesia is among the largest 25 carbon dioxide emitting countries when considering only fossil fuels, and among the top three or five when emissions due to deforestation and land use change are included. Emission per capita from fossil fuels are still low in comparison with other countries, but have been growing fast, and are likely to overtake t...
Several developing economies have announced carbon emissions targets for 2020 as part of the negotiating process for a post-Kyoto climate policy regime. China and India's commitments are framed as reductions in the emissions intensity of the economy by 40-45% and 20-25%, respectively, between 2005 and 2020. How feasible are the proposed reductions...
We analyse the long-term efficiency of the emissions target and of the provisions to reduce carbon leakage in the Australian Government’s Carbon Pollution Reduction Scheme, as proposed in March 2009, and the nature and likely cause of changes to these features in the previous year. The target range of 5–15 per cent cuts in national emission entitle...
Price floors in greenhouse gas emissions trading schemes can have advantages for technological innovation, price volatility, and management of cost uncertainty, but implementation has potential pitfalls. We argue that the best mechanism for implementing a price floor is to have firms pay an extra fee or tax. This has budgetary advantages and is mor...
There is demand for qualitative and quantitative economic analysis on the optimum degree of climate change mitigation and adaptation, the optimal timing of such actions, and their optimum distribution between countries and sectors. This paper discusses what is, as well as what is not, possible for economic modelling in this field. Specific referenc...
We give empirical welfare results for global greenhouse gas emission control, using the first multiparty model to combine tax-versus-trading under uncertainties with revenue recycling. Including multiple parties greatly reduces the welfare advantage of an emissions tax over emissions (permit) trading in handling abatement-cost uncertainties, from t...