31
Aug
2011

Pain of carbon protectionism

by Tony Wood


By Tony Wood and Tristan Edis

Claims for carbon price assistance signal a new era of protectionism. The Government’s climate change plan grants generous financial assistance to industries that claim the introduction of a price on carbon will hurt their business when they have to compete with overseas rivals that don’t face the same cost. Yet a Grattan Institute review of the assistance proposed to three emissions-intensive industries — coal mining, liquefied natural gas (LNG) and steel — found that even allowing for recent economic changes such as the effect of the high Australian dollar, the level of protection the Government proposes is costly and unjustified.