Pricing carbon pullution - in a nutshell
Why we must act now
Despite the world's governments committing at Copenhagen to keep global warming below 2 degrees, it is now widely accepted that even if all current commitments were implemented, we are on track to see warming of at least 4 degrees by the end of the century.
We have at most a decade for emissions to peak and start declining, or we risk creating a world where climate change runs out of control and the impacts on our food and water, our economic security, our health and well-being become catastrophic.
We owe it to our children to adopt a sensible risk management approach before it’s too late.
Why we need a carbon price
To protect our climate and reap the benefits of a modern economy, we need to transform our pollution-dependent society away from the dead end of coal to the exciting opportunities of renewable energy.
A carbon price – or putting a price tag on pollution – is an important tool in the toolbox.
But the most important thing to understand is that it is not a tax, in the same way that the GST is added onto every item you buy. The idea of of a carbon price is that it creates a price signal for the producers of goods, not consumers.
If power companies and other large emitters respond to the carbon price by moving out of coal and gas and investing in renewable energy (which doesn't require the purchase of permits), we'll reduce our emissions without the need for electricity and other prices rising.
Putting a price tag on pollution means rewarding Australian businesses that clean up their act and charging the ones that do not.
A carbon price will encourage business to invest in clean energy and create jobs particularly in regional Australia, while raising revenue for household compensation, support for vulnerable communities, and investment in research and development.
However, a carbon price alone will not drive the transformation to a clean economy in the time-frame we need.
We also need a range of complementary measures such as a feed-in tariff for renewable energy, a rapid reduction in fossil fuel subsidies and investment in energy efficiency measures particularly for low income households, to help transform Australia into a modern, zero carbon economy.
With Britain recently announcing targets to halve greenhouse gas emissions from 1990 levels by 2025, it is way past time for Australia to act, or we risk being left behind as the rest of the world moves to take advantage of the enormous opportunities in renewable energy.
Read more about why we need a carbon price.
How it would work
Up to 1000 of Australia’s biggest carbon emitters would have to buy permits for the pollution they put into the air. This would mean the cost of pollution would encourage companies to be more efficient and invest in cleaner technologies like solar power.
As these companies respond to the price signal and invest in low emission alternatives, both our total emissions and the price impact on households will be reduced.
At the beginning of the scheme the price of permits will be fixed. This will create a stable investment environment for business decision-making. After 3-5 years, companies will be able to trade permits and the price will move up and down.
Households will be compensated
Lower and middle income households will be compensated for any increased costs to electricity and other products and, in many cases, may come out in front, especially if people reduce their energy use.
Business will get some compensation too
Some companies, such as those who compete in overseas markets will get some compensation to help them adjust. But the Greens do not want to see the coal power generators and other big polluters get a free ride at the expense of households and the community. Too much compensation and you risk diluting the price signal that encourages business to shift to clean energy alternatives.
Investment in solar
Money from a price on pollution may also be invested in research and development into solar and other renewable energy technologies. The Greens also want a feed-in tariff which sets a fair price for clean energy to encourage investment in large solar power plants and other renewable energy.
Tony Abbott’s fear campaign
We are at a turning point in Australian politics. We need to make sure the government does not cave into pressure from the Coalition.
Tony Abbott, climate change deniers and radio shock jocks are running a scare campaign against a price on pollution reminiscent of big tobacco’s tactics against anti-smoking campaigns in the past.
We can’t let them win. Time is too short.
For more information or to get involved in the national Greens climate campaign, go to Greens | Climate Action