Household subsidies and imposed regulation within the “Clean Energy Futures” scheme will reduce the effectiveness of carbon pricing and cost the environment in the long run.
A University of Melbourne study has found that the contentious scheme may not be as effective as initially thought, and that household assistance would unnecessarily increase the cost of a carbon pricing mechanism.
However, Professor Peter Lloyd suggests that despite the costs of subsidisation, the scheme is still a better alternative to not taking action at all.
“The carbon price even with the tax cut alters the relative prices of more or less emission-intensive goods and services,” said Professor Lloyd.
Read more at The University of Melbourne