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Discussion paper

The Australian government is faced with two opposing climate policy paths to reduce Australia’s greenhouse gas emissions — driving investment in decarbonisation or continuing to drive investment in carbon credits.

This tension has played out historically in Australia’s climate change policies. This paper demonstrates how government policy can, and has been, instrumental in channelling investment in decarbonisation strategies, such as through the Renewable Energy Target (RET). It also demonstrates how government policies then shifted private investment to the carbon credit industry.

The result of the changing policy focus has been a decrease in renewable energy investment, increasing industrial emissions and rapid growth in carbon offset projects.

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