Received: 5 January 2018 Revised: 7 April 2018 Accepted: 7 May 2018 DOI: 10.1111/1467-8500.12328 RESEARCH & EVALUATION Climate change policy discontinuity and its effects on Australia's national electricity market Paul Simshauser Anne Tiernan Griffith Business School, Griffith University, Nathan, QLD, Australia Correspondence Anne Tiernan, Griffith Business School, Griffith University, Nathan, QLD 4111, Australia. Email: a.tiernan@griffith.edu.au Abstract Australia's National Electricity Market (NEM) became unstable in 2016/2017 after 20 years of consistent perfor- mance. The South Australian grid collapsed on 28 Septem- ber 2016 – Australia's first black system event since 1964. Wholesale prices in the region trebled to $120+/MWh; soon after Hazelwood power station announced its exit with just 5 months’ notice. The problem spread as prices elsewhere doubled to $89/MWh from a long-run average of $42.50. The NEM is experiencing a supply-side crisis. Consistent with the requirement to decarbonise the system, aged coal-fired generators are exiting but decades of cli- mate change policy discontinuity has frustrated the entry of new plant. Long-dated capital-intensive asset indus- tries like electricity supply anticipate a conventional pol- icy cycle. What they have experienced instead is consistent with garbage can theory. Policy clarity may be emerging for only the second time in two decades. As with the NEM, its durability will depend on cooperative federalism. KEYWORDS Australian national energy market, climate change policy, garbage can theory, policy uncertainty 1 INTRODUCTION The origins of Australia's National Electricity Market (NEM) date back to 1994; from then various member states progressively synchronised their state-based grids and state-based spot markets onto a single operating platform. Although a national market brokered through the Council for Australian Governments (COAG), for clarity, it is a national market founded in State law. Energy supply has long Aust J Publ Admin. 2018;1–20. wileyonlinelibrary.com/journal/aupa © 2018 Institute of Public Administration Australia 1