Tim Nelson is the Head of Economic Policy, Paul Simshauser is the Chief Economist, Fiona Orton is the Manager of Greenhouse and Energy Reporting and Simon Kelley is the Manager of Energy Policy and Regulation at AGL Energy Ltd. Any errors or omissions remain entirely the responsibility of the authors.
Delayed Carbon Policy Certainty and Electricity Prices in Australia: A Concise Summary of Subsequent Research*
Article first published online: 20 FEB 2012
© 2012 The Economic Society of Australia
Economic Papers: A journal of applied economics and policy
Volume 31, Issue 1, pages 132–135, March 2012
How to Cite
Nelson, T., Simshauser, P., Orton, F. and Kelley, S. (2012), Delayed Carbon Policy Certainty and Electricity Prices in Australia: A Concise Summary of Subsequent Research. Economic Papers: A journal of applied economics and policy, 31: 132–135. doi: 10.1111/j.1759-3441.2011.00161.x
- Issue published online: 20 FEB 2012
- Article first published online: 20 FEB 2012
- carbon tax;
- policy uncertainty;
- decision making;
- electricity prices
In this brief update on analysing the economic costs associated with carbon policy uncertainty, we outline the public policy processes commenced by the Commonwealth Government following the publication of Nelson et al. (2010). We also summarise the research completed by other economists testing the hypothesis that there are material economic costs associated with ongoing carbon policy uncertainty. Independent studies by Frontier Economics (2010), Deloitte (2011) and Sinclair Knight Merz (2011) all conclude that climate change policy uncertainty will result in sub-optimal capital investment within the electricity sector. In turn, this sub-optimal investment will manifest itself in unnecessary increases in electricity prices.