Issues and tradeoffs involved in adopting a consumption approach to climate mitigation policy

Summary

​Issues and tradeoffs involved in adopting a consumption approach to climate mitigation policy
The Commonwealth Government intended to introduce an emissions trading scheme (ETS) as a major mechanism for establishing a price on carbon in the Australian economy and as a major pillar in climate policy in general.
The scheme (termed the CPRS) did not include agricultural producers as covered entities (that is, entities that are required to report on their emissions and to remit permits to cover those emissions), although it does include a number of processing activities.  Agriculture was potentially indirectly affected by the price of carbon established.
The government was predisposed towards including primary agricultural production in the CPRS by 2015, although other options were also being considered. This research considered whether a so called ‘consumption approach’ to carbon pricing (and domestic greenhouse gas mitigation) would be of benefit to the red meat industry given the real possibility that it could have been be covered in some way by 2015.
The report covered: a recap of the ways in which the standard approach (an ETS) affects the red meat industry — in particular the key challenges that this policy implies; the mechanics of a consumption approach to greenhouse gas mitigation and how it differs from the ETS or ‘production approach’; what is lost and what is gained from the point of view of the red meat industry in adopting a consumption approach versus an ETS; and some illustrative simulations to examine some of the effects of a partial consumption approach.
The final report was confidential and only provided to peak industry councils.