Competitiveness and carbon pricing: border adjustments for greenhouse policies

The Australian government has justified its failure to ratify the Kyoto Protocol by arguing that a cap on greenhouse gas emissions would have an adverse and disproportionate impact on the Australian economy because of our heavy dependence on emissions-intensive industries. Hugh Saddler, Frank Muller and Clara Cuevas propose a new approach which would preserve the competitiveness of energy-intensive producers while maintaining the carbon price signal within the domestic economy.

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