Climate Change Authority

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Part E Implementation issues under the carbon pricing mechanism

Australia’s climate policy settings are under review. The Government has indicated it intends to repeal the carbon price and replace it with a Direct Action Plan to reduce Australia’s emissions.

Under the current legislative arrangements, the carbon pricing mechanism is the primary way Australia would meet its 2020 targets. It imposes a limit on more than half of Australia’s emissions. The Authority is required to recommend annual caps for the carbon pricing mechanism for the period 2015–16 to 2019–20.

There are many factors to consider when calculating and recommending caps, including the national emission reduction goals. Part E examines those factors, and calculates caps corresponding to the 15 and 25 per cent target options discussed in Part C of this report and being considered by the Authority.