Pricing policy Australia

Scheme negotiated prices with pharmaceutical companies, just as health plans do in the United States. Mr Vaile stated that such negotiations were fundamental policy of our government and consecutive governments in Australia. ... 

But shielding Australian producers from high emissions prices that apply elsewhere results in less than the economically efficient amount of abatement undertaken in Australia." As pointed out above, the direct effect of less abatement under the scheme means more international purchases of abatement units, or extra policies outside of emissions pricing. Furthermore, where separate and only partly compatible emissions pricing regimes apply in different countries, this imposes additional transaction costs on business. 

Drawing on the lessons of the economic prosperity that has come with openness to international markets (Anderson, 2000), the future for a trade-intensive economy such as Australia s is in harmonization with international emissions markets, insofar as they are mature and underpinned by stable policy frameworks. An economically efficient outcome, with comparable emissions prices to other countries, could of course be achieved in ways other than by linking emissions trading markets. But in the context of an international agreement based on quantitative emissions targets, broad access to international carbon markets would be necessary. 

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