The Australian government has proposed a raft of measures designed to cut the country’s carbon emissions and boost investment in low-carbon technologies.
Prime Minister Julia Gillard wants to put a price on carbon pollution, close Australia’s most polluting power generators and expand the clean and renewable energy sector.
The proposals are the country’s largest economic and environmental reform in a generation with far-reaching implications for Australia’s coal-dependent economy.
They include a legislated target to reduce Australia’s emissions by 80 per cent below 2000 levels by 2050 – an increase on the previous target of 60 per cent. Gillard also wants to increase the renewable energy target to 20 per cent by 2020 and close 2000 MW of coal-fired generating capacity by 2020.
The proposals are likely to polarise voters as well as the political parties but are necessary because carbon emissions will continue to rise with economic growth, says the government.
Australia has the world’s highest per-capita carbon emissions.
At the heart of the new scheme is a fixed A$23/tonne carbon tax that would be payable by around 500 companies from July 2012. This would transition in July 2015 to a cap-and-trade emissions trading scheme that will be the largest of its kind outside Europe.
The government has announced a A$1.3 billion coal sector jobs package to help shield the coal industry from the impacts of the carbon tax, as well as three measures to create economic incentives for businesses to invest in low and zero emissions innovation.
The electricity generating capacity closures will affect Australia’s most emissions-intensive generators, who will receive payments for closures. Coal-fired generators will also receive payments and permits to help them manage the transition, and will also be offered loans to help them finance their purchase of carbon permits.
The government says it will also establish an Energy Security Council to advise the government on managing energy security and will ask the Australian Energy Market Operator to expand its planning scenarios to prepare for the integration of more renewable energy to the grid.
Australia’s parliament has rejected two previous attempts to tax carbon emissions. It is expected to vote on Gillard’s proposals in October. To overcome opposition, Gillard has proposed that more than A$24 billion raised from pollution permit sales would be distributed to households through tax cuts.
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