The Grattan Institute has released a new report, entitled, Learning the hard way: Australian policies to reduce carbon emissions, which assesses the outcome of 300 programs to tackle climate change introduced by Australian governments since the Kyoto Protocol in 1997.

The report analyses four kinds of carbon abatement instruments: market mechanisms; rebates; energy efficiency standards; and grant tendering schemes.

Of all the measures analysed, market mechanisms, such as a carbon trading scheme, have delivered the greatest emissions reductions and have met targets ahead of time.

By contrast, $7 billion of grant-tendering schemes – upfront grants to companies for proposals to reduce emissions – have done very little to reduce greenhouse pollution.

Governments have also spent $5 billion on rebate programs to encourage the purchase of low-emission products. Again, the impact on emissions growth has been minimal.

A fourth kind of program – energy efficiency standards – can reduce emissions cheaply and effectively, but is limited in scope.

Based on experience, only an economy-wide carbon price (a type of market mechanism) can meet Australia’s 2020 target, endorsed by both main political parties, of reducing annual emissions by five per cent below 2000 levels.

The report was written by John Daley, CEO and Tristan Edis, Research Fellow at the Grattan Institute.

It can be downloaded at http://www.grattan.edu.au/pub_page/077_report_energy_learning_the_hard_way.html