Coming Out Clean: Australian Carbon Pricing and Clean Technology Adoption

Australia implemented a carbon pricing scheme from July 2012 to July 2014 to reduce emissions. Using data envelopment analysis, I investigate whether the uptake of clean technology accelerated during this period. I also explore a few other related strategies firms used to reduce emissions. I find that during the scheme firms accelerated the adoption of cleaner technology. Much of this acceleration came from firms lagging in technology catching up with the frontier. Reallocation of operation towards cleaner facilities and opting for more efficient scale sizes also helped the pace of emissions reduction. The pattern shows some variation from industry to industry. All these activities subside as soon as the carbon pricing is repealed.