REDUCING CARBON-DIOXIDE EMISSIONS FROM AUSTRALIAN ENERGY USE

Debate about the increasing concentration of carbon dioxide (CO2) in the atmosphere, and fears that it will result in an intensification of the greenhouse effect and global warming, have spurred consideration of sustainable development. It has been claimed that technology to improve energy efficiency already exists that is cost-effective without consideration of the gains from abatement of carbon dioxide emissions. Likewise, changes in the behaviour of households or firms that would result in lower energy use per capita have been predicted as answers to the problem. But the question of implementation is often ignored or assumed away, while it should correctly be costed into the technology or the behavioral changes. This paper attempts to redress this lacuna in the debate, by analysing policy options within a framework of exchange, authority, or persuasion. Carbon taxes and lower interest rates are the recommendation.