CANBERRA – Producers and consumers of fossil fuels in Australia, one of the world’s coal and gas powerhouses, should pay a new climate levy under efforts to accelerate a transition to a greener economy, according to two former government advisers.
The charge would impact more than 100 businesses and be levied on each tonne of pollution at a rate equivalent to the European carbon price, Professor Rod Sims and Professor Ross Garnaut of the pro-climate action think-tank The Superpower Institute said on Feb 14.
Their plan is aimed at generating an initial A$100 billion (S$87 billion) a year to help fund deployments of renewable energy, improve power grids and underwrite new infrastructure to support the development of green export industries.
A current focus on managing domestic emissions is too narrow, according to Prof Sims, a former head of the Australian Competition and Consumer Commission.
“That gets rid of a little over 1 per cent of world emissions,” he said in an interview. “On the other hand, if we make green iron and green aluminium, urea, silicon, aviation fuel, we can reduce world emissions by anywhere between 6 per cent and 9 per cent.”
The proposal is likely to stir fresh debate over climate policy in Australia, which in 2014 scrapped a short-lived carbon levy after fierce opposition from some sectors.
Prime Minister Anthony Albanese’s government legislated Australia’s first emissions targets – aiming to cut 43 per cent from 2005 levels by 2030 – though it has faced some criticism for not pushing for more aggressive curbs.
At the same time, Mr Albanese has seen opposition from groups in regional Australia, including farmers, who argue new power lines required to support clean energy are taking up agricultural land.
Prof Sims will join Prof Garnaut, a former government adviser on climate change, to deliver a speech on Feb 14 to the National Press Club in Canberra calling for new incentives to boost early-stage investment in clean technologies, and to set out their plan for a carbon solutions levy.
“Some of these policies will seem controversial to some and may be rejected immediately, but today is the beginning of the debate, not the end,” Prof Sims planned to say, according to a text copy of his speech. BLOOMBERG
