Pricing Carbon Has Passed the Acid Test

I am quoted in today’s Sydney Morning Herald piece on the carbon pricing scheme.

Tomorrow, the nation steps over the threshold of carbon pricing into a domain where pumping out greenhouse gas has an economic price as well as an environmental one. The federal government’s Clean Energy Bill is a compromise with which no one is entirely happy. But the consensus of economists is that it is likely to work well enough to cut emissions by 5 per cent, the minimum supported by the major parties.

“If you assume the political will to implement the scheme is there, a huge ‘if’, then the question is whether the scheme is designed well enough to achieve its goals - I think it is,” says Martin Jones, a researcher at the Centre for Energy and Environmental Markets and University of NSW. “The mechanism is an effective one: emissions trading schemes have proven records of reducing emissions.”