Carbon Bloating: The unintended consequences of giving away free permits to big polluters

by Matt Grudnoff

The Gillard Government recently passed legislation which will, for the first time in Australia, see big polluters pay for their greenhouse gas emissions through a price on carbon. While the introduction of a carbon price will not in itself drive a substantial reduction in Australia’s emissions, it does begin to build the necessary policy infrastructure to achieve larger reductions in the future. The legislation sets out how the carbon price will work as well as the detail of the compensation program that will be given to the biggest polluting firms.

While the legislation has now passed, the regulations that set out some of the important detail of the compensation program have yet to be finalised. The regulations will include such matters as the assistance rates paid to emissions-intensive trade-exposed (EITE) industries.

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