By Rod Mitchell
Australia needs much more aggressive cuts in emissions to reach net zero by 2050 as shown by the graph below:
Note: LULUCF= Land Use, Land Use Change and Forestry
The Citizens’ Climate Lobby of Australia advocates for a Carbon Fee and Dividend Scheme which is an effective, economy wide, carbon price to reduce greenhouse gas emissions.
The scheme would levy a fee – a dollar cost for each tonne of CO2 equivalent emitted – to be levied at its source, whether it is a coal mine, an oil well or gas field located here in Australia. The revenue collected will be distributed as equal dividends to all voting- age Australian residents.
Currently, carbon credits (ACCUs) can be purchased by corporations who wish to offset their emissions in Australia. Most of these ACCUs are created by the government’s Emissions Reductions Fund, effectively at taxpayer expense. ACCUs have done little to bring down Australia’s emissions to the level required and they place no obligation on corporations to take more action.
For example, AGL is the biggest single emitter in Australia (41.7 million tonnes of CO2 equivalent in 2019). AGL has no incentive to close its Bayswater coal-fired power station in NSW before 2035 nor its dirtiest coal-fired power station at Loy Yang in Victoria before 2048. Meanwhile, it will be placing the onus on its commercial and residential customers, who will have the option of paying extra to AGL so it can buy offsets.
How the Carbon Fee and Dividend Scheme would work
- A fee (ie a dollar cost per ton of CO2 equivalent emitted) is levied at its source, whether it is a coal mine, an oil well or gas field located here in Australia. It would also be levied on imported carbon-intensive products as they enter Australia if there is no carbon price applied in the country of origin.
- The fee will increase each year, giving emitters, investors, businesses and consumers a steadily increasing incentive to switch to low/zero carbon alternatives.
- As the price of carbon-intensive products rises, low-carbon products will become more competitive and attractive to consumers.
- The revenue collected will be distributed as equal dividends to all voting- age Australian residents.
- Depending on how many carbon-intensive products they consume, most residents will receive more in dividends than they spend on the now higher-cost items.
- The scheme is not paid for by the taxpayer or the community and is therefore much more equitable.
- The Carbon Fee and Dividend scheme is not a tax. The carbon fee does not go into government revenue, where it could be used for other purposes.
- The social and environmental costs of emissions are internalised into the price of the fossil fuels, thus ending a hidden subsidy that keeps them artificially cheap.
- A transition to a low-carbon economy is assured.
For further information please read A Climate Dividend for Australians by the University of New South Wales.
Consider signing the CCL petition for climate action which you may find here. There are links in the petition to further information.
Or contact CCL Australia via our website:
Rod Mitchell is the National Coordinator of Citizens’ Climate Lobby, Australia