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Policy makers eye pricing scheme

26 February 2013

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Frank Jotzo is Director of The Centre for Climate Economics and Policy at Crawford School, and director of the School’s Resources, Environment and Development program. He currently teaches the graduate courses Domestic Climate Change Economics and Policy and Issues in Development and Environment.

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China is keeping a close eye on Australia's carbon pricing scheme, but that doesn't mean they'll adopt the same ideas, according a leading expert.

Associate Professor Frank Jotzo of the Centre for Climate Economics and Policy at Crawford School says that as China's policy makers start making decisions about how to combat climate change, they are watching closely the success or otherwise of the Australian model. Jotzo told national public radio show The Wire that one element of the Australian scheme is of particular interest in China.

“There are particular features of the Australian scheme that are of very high interest in China. In particular, starting emissions trading with a so-called fixed price where the price of carbon is pre-determined for a number of years before letting the market price float,” he said.

“There has been a very high level of research and scrutiny going on in Chinese policy and government circles about the Australian carbon pricing scheme.”

Jotzo – who is involved in ongoing research about options for market-based mechanisms for reducing carbon emissions in China through an Australia-China joint project - added that there are active discussions in China on the best model to adopt.

“China is acutely aware of the issue of climate change and has other objectives and motivations to put a lid on the rate of growth of energy consumption and pollution as well,” he said.

“We’ve seen China implement a host of policies in their command and control mode, such as mandating that individual factories should shut down. But increasingly we’re seeing a realisation in China that market instruments and pricing signals are actually a much more efficient way to go about the objective of achieving greater energy efficiency and moving away from coal.”

But whatever the outcome of those discussions, one thing is certain says Jotzo – that the Chinese government will go their own way.

“[If you] asked whether China will do their own thing then the answer is yes – China will do whatever China decides is the best solution for them.”

You can listen to the full interview here:

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