ABSTRACT
Australia has a long history of designing emissions trading schemes (ETS) but a far patchier one in introducing and maintaining policies for pricing greenhouse gas (GHG) emissions. Australia thus represents an important case study of how diffusion and domestic forces intertwine during ETS design in resource-intensive economies where climate policy affects core commercial concerns and becomes embroiled in electoral politics. The sector and GHG coverage of the Australian Carbon Pollution Reduction Scheme (CPRS) and Carbon Pricing Mechanism (CPM) can be attributed largely to domestic factors, not least Prime Minister Kevin Rudd's ambition to seal his political legacy by developing the world's 'best' emissions trading scheme. The CPM allocation mechanisms owe their existence chiefly to domestic negotiations to make the Clean Energy Future acceptable to affected industries but their development was supported by analysis of the European Union allocation system. Revenue earmarking was an area where the CPM deviated markedly in scale and scope from the CPRS and other national ETSs.
