A large-scale longitudinal has quantified the effectiveness of carbon pricing, finding that countries with a price on carbon have more success in reducing emissions over time.
Australian researchers used emissions data to examine 142 nations - or 96 per cent of the world's population - to analyse what impact carbon pricing policies had on emissions reduction in the 20-year period between 1997 and 2017.
What did the study find?
Study co-author Paul Burke, an economist at the Australian National University, said while the research team knew the economic theory on carbon pricing was strong, they were keen to see how it played out in real life.
"If there is a price charged on emissions then one is likely to substitute away from high emissions production processes, like using coal, towards lower emission technologies like solar and wind. So the theory is very strong.
"The key finding is that countries with carbon prices are much more likely to have (emission) reductions over time. And we can see it very clearly in the data."
Associate Professor Burke said the extent of the difference between countries that did and did not have a carbon price was surprising.
"If a carbon price is introduced then subtract two percentage points from that growth rate.
"One other finding we have is, the higher the carbon price then the quicker the emissions reduction. So every additional euro of carbon price, or you can choose another currency of course, helps to reduce the emissions growth rate. A higher carbon price leads to greater emission cuts."
Meanwhile, countries that did not have a carbon price experienced an on average three percent rise in emissions.
Study co-author Rohan Best from Macquarie University said it is a significant finding.
The two trajectories of nations that did have a carbon price in 2007, compared to those that did not. Source: Rohan Best, Paul Burke, Frank Jotzo
"I think this has a lot of relevance for any country who is considering either introducing a carbon price or raising a carbon price."
He said there has been interest in the study from think tanks in Turkey and he anticipated that the number of countries with a carbon price will grow.
"It is going up the 50 mark (of nations with a carbon price) as time goes on. There could be even more countries in years to come."
Could a carbon price be adopted again in Australia?
Australia had a carbon price for two years before it was repealed in 2014 by then Prime Minister Tony Abbott.
At that time, the political bipartisanship of 2007 around climate change had disappeared.
Politics around the issue had become increasingly toxic, dominating three election campaigns - 2007, 2010, 2013 - and contributing to the demise of two Labor prime ministers: Julia Gillard and Kevin Rudd.
Julia Gillard's broken vow that "there will be no carbon tax under the government I lead" lingered in the background, even as voters resonated with Kevin Rudd's assessment that "climate change is the great moral challenge of our nation".
Still more people at the time were convinced by Tony Abbott's verdict: "It [the carbon price] will hit everyone's power bills. It is just going to go up, up and up. And from today, people are paying the price of Julia Gillard's betrayal."
Tony Wood, from public policy think tank the Grattan Institute, said he remained optimistic that carbon pricing will be an inevitable consideration in the future, based on the strength of the economic argument.
But he warns that the critical ingredient in any re-adoption of carbon pricing will be the handling of the political narrative and community buy-in.
"Unfortunately, there are a whole bunch of reasons why we are not yet able to embrace that - that is the reality of the political situation that we're in. And you can also see because of the somewhat learned history federal Labor is not in a position to embrace that.
"And even the state governments - a number of state governments have also adopted a zero emissions by 2050 long-term target. They don't have policy instruments, they don't have carbon prices either. Because it is still seen to be a bit of a poisoned chalice.
"Now, I think eventually we will realise that we need to drink from what appears to be a poisoned chalice - and when we do, we'll find that it actually tastes pretty good."
The federal government has identified of its long-term emissions reduction strategy to meet Australia's 2030 Paris target of a 26-28 per cent reduction on 2005 levels.
The final version of the Technology Investment Roadmap and Australia's first low emissions technology statement are set to be released in coming months, ahead of the next major UN climate conference, now postponed until November 2021.
The CEO of ClimateWorks Australia, Anna Skarbek, said it is important to set the right trajectory for emissions reduction post-COVID.
"COVID-19 has the potential for positive and negative impacts on climate action.
"On the positive front, it is causing a major rethink in the way governments support industry, in particular. And in fact, an injection of investment to stimulate the economy, which can help bring forward some of the investment that we knew we would need to help upgrade technologies so that they are lower emissions.
"The negative implications of COVID-19 are distraction. It is an urgent crisis and many government and business leaders are now having their attention to the very short-term health needs and welfare needs of employees and businesses; and that is obviously a challenge to grapple with."
