Putting a price on carbon: potential implications for the Australian wine industry

The Australian Government recently announced a proposed carbon price plan to come into effect in 2012. The Australian Government argues that putting a price on carbon emissions ought to encourage carbon-producing industries to reduce their carbon pollution, reduce adverse climate change effects, and protect vital industries. The wine industry is both a climate-dependant industry and a carbon polluter. In recent years, Australian winemakers have become increasingly concerned about climate change effects on the wine industry as well as the impact of winemaking on the environment. In response to this, some winemakers have implemented various measures in order to be better equipped to combat effects associated with climate change, and also to reduce their carbon footprint. This paper presents an overview of the relevant sections of the proposed carbon pricing plan, as well as analysing the potential impacts of a price on carbon emissions for the Australian wine industry. From the limited information released by the Australian Government, this paper finds that a price on carbon would hinder growth in the small market for Australian wines produced using environmentally-friendly techniques.