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.

Energy production is vital to the Australian economy, but the carbon tax policy introduced in July 2012 triggered substantial fear in the energy sectors.

In the absence of a global agreement to reduce emissions, Australia has adopted a carbon taxunilaterally to curb its own emissions.

Executive summary A reliable and affordable supply of energy is a fundamental component to a vibrant economy. As a major source of commodities, including significant known reserves of low carbon emission energy sources, Australia is well positioned to supply the world’s future energy needs. In...