Poll shows economists believe Clean Energy Target should be adopted
August 28, 2017
A poll conducted jointly by Monash Business School and the Economic Society of Australia shows that leading Australian economists believe a Clean Energy Target (CET) should be adopted, despite concerns it is not the best economic design compared to a tax or cap.
The poll of the ESA Monash Forum of leading economists showed that a majority believed that Finkel’s suggested Clean Energy Target, the key recommendation of his blueprint for reform of the electricity industry that has not been accepted by the Australian government, was not necessarily a better option than previously suggested policies such as an emissions trading scheme. But many added that doing nothing would be worse still.
The Finkel Review’s terms of reference explicitly precluded it from advising on economy-wide emissions reduction policy, and implicitly required it also to reject emission reduction policies such as an emissions tax or cap and trade scheme.
In his overview of the poll's results, Dr Bruce Mountain an economist with the energy consultancy firm, CME, said a headline result from the survey is that a large majority of the panel does not think the CET is preferable to a tax or cap and trade scheme. None strongly agreed that the CET was preferable, whereas 16 either disagreed or strongly disagreed, and four agreed.
However, he said that examination of the comments suggests greater sympathy with Finkel’s CET recommendation than the bare numbers indicate.
“Even for those who strongly disagreed that the CET was preferable, none suggested that proceeding with a CET would be worse than doing nothing. But eight commented that not proceeding with the CET would be worse than doing nothing.”
Of the 19 that provided comments on their response, 16 thought a tax or cap and trade scheme better than a CET.
The ESA Monash Forum is designed to explore the extent to which Australian economists agree or disagree on key national and global public policy issues, through regular polling of the eminent economists on the ESA's National Economic Panel .