Producers and consumers of fossil fuels in Australia should pay a new climate levy to accelerate the transition to a greener economy, according to two former government advisers. The levy, proposed by Rod Sims and Ross Garnaut of The Superpower Institute, would be levied on each tonne of pollution at a rate equivalent to the European carbon price. The funds generated, estimated at A$100 billion per year, would be allocated to renewable energy deployment, power grid improvements, and infrastructure development for green export industries.
Sims, a former head of the Australian Competition and Consumer Commission, argues that the current focus on managing domestic emissions is insufficient to address the global climate challenge. He believes that by producing green iron, green aluminium, urea, silicon, and aviation fuel, world emissions could potentially be reduced by 6 to 9 percent.
The proposal is expected to spark a debate on climate policy in Australia, a country that had previously abolished a carbon levy in 2014 due to strong opposition from certain sectors. Despite the government’s implementation of emissions targets, aiming to reduce emissions by 43 percent from 2005 levels by 2030, critics argue that more aggressive measures are necessary.
Prime Minister Anthony Albanese’s government has faced opposition from groups in regional Australia, particularly farmers, who claim that the construction of new power lines to support clean energy is encroaching on agricultural land.
Sims and Garnaut will deliver a speech on February 14 at the National Press Club in Canberra, outlining their plan for a carbon solutions levy and advocating for incentives to boost early-stage investments in clean technologies. They acknowledge that their proposals may be controversial but emphasize that this marks the beginning of a necessary debate.
By implementing a new climate levy, Australia aims to not only reduce domestic emissions but also support the development of green industries and make significant contributions to global emissions reductions. The ensuing debate among policymakers and stakeholders will determine the future direction of climate policy in the country.
