Discussion paper
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By employing a computable general equilibrium (CGE) model with an embedded electricity supply sub-model, this paper reports the effects of a national ETS on the Australian energy sectors. The modelling results show that the ETS can reduce emission effectively but with a mild negative impact on the economy. The impact of the ETS on the energy sectors varies. The renewable electricity generators will be the biggest winners. Brown coal electricity and oil electricity will be hit hard and effectively exit the market. Opposite to expectation, the black coal electricity will expand its production considerably. The exit of brown coal electricity will spell hardship to the brown coal sector.

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