Mr Edis discussed a report he recently co-authored for The Grattan Institute addressing concerns that introducing a carbon price would send Australian industry and jobs offshore. Specifically, the report analyses whether protective measures to avoid this, such as the Federal Government issuing free carbon credits to certain companies, is an effective strategy.

The report, titled Restructuring the Australian Economy to Emit Less Carbon suggests that, while some industries may well be forced offshore owing to the introduction of a carbon price, some industries that the Government is considering protecting in the advent of a carbon price, would not actually be affected by it. As such, to make carbon allowances for them is counterproductive to a carbon-restrained future.

Industries like aluminium and oil refining could likely be driven offshore Mr Edis explained, but instead of spending money on providing protection for them, it would be better spent assisting workers and communities affected by industry relocation offshore to enable them to adjust.

The Liquefied Natural Gas production industry and most coal mining industry would be less affected by a carbon price than is currently perceived, said Mr Edis. While they may become less profitable with the introduction of a carbon price, shielding these industries imposes large costs on the rest of the community and can discourage the economy from efficiently adjusting to produce less carbon.

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Mr Edis concluded that much of the protection proposed for the major emissions-intensive industries is unnecessary or poorly targeted, and it would delay the structural adjustment required to move to a lower carbon economy.