New policies create a new politics: issues of institutional design in climate change policy

Institutional design focuses on the task of providing accountability and effective monitoring of decision-making by bodies vested with the coercive powers of the state in a context where information is inherently limited, costly to acquire and asymmetrically distributed. This paper focuses on issues of institutional design in the context of climate change policy. It examines proposals advanced in the June 2008 Draft and Final Reports of the Garnaut Climate Change Review (‘Garnaut Reports’), and in the Government’s July 2008 Green Paper and December 2008 White Paper on the Carbon Pollution Reduction Scheme (‘Green and White Papers’) with respect to how revenues raised by the sale of emissions permits would be used; and second, the proposed governance arrangements for the emissions trading scheme.