In Short : Implementing a carbon tax is viewed as a fairer and more effective method to achieve the 2030 carbon target. This approach encourages individuals and businesses to reduce carbon emissions by assigning a monetary value to carbon pollution. By internalizing the environmental cost, it incentivizes cleaner practices and investments in renewable energy. A carbon tax promotes a market-driven transition to a low-carbon economy, fostering sustainability while addressing climate change effectively and equitably.
In Detail : Doing whatever is possible to move back toward a broad-based carbon tax would help take pressure off the daunting decarbonisation challenge while retaining the economy’s energy competitiveness and keeping the lights on.
The Australian Financial Review Energy and Climate Summit confirmed the faltering energy transition was well behind the target of 82 per cent renewables by 2030 that also underpins the legislated, economy-wide target of 43 per cent carbon emissions reduction.
The sector, which is taking most of the burden in reaching the nation’s interim climate goal and fulfilling its international obligations to help abate dangerous global warming, is falling behind schedule.
According to the federal government’s latest emission trend baseline scenario, the projected 55 per cent reduction on 2020 levels of greenhouse gas produced by the coal-intensive electricity sector by 2030 not only far outweighs all other sectors combined, but is 22 per cent bigger than the total reduction across the whole of Australia’s fossil-fuel-intensive economy.
If Australia doesn’t reach the renewable target by 2030, it won’t reach the decarbonisation target either.
Hence, the urgency in getting the transition back on track by tackling the investment, planning, and social-licence bottlenecks the Summit identified as holding up vital renewables and transmission projects.
Even the Australian Competition and Consumer Commission on Tuesday parked its new tough line against mergers to approve Brookfield’s takeover of Origin Energy, on the public-benefit grounds that the Canadian asset manager giant was better placed to speed up the decarbonisation of the nation’s biggest electricity producer.
Yet, the disproportionate burden on the electricity system also exposes the policy failure to spread the responsibility for reducing carbon emissions fairly across the whole economy.
Decarbonisation of an electricity grid responsible for a third of the nation’s carbon pollution – which is running into real-world cost and complexity challenges – is being asked to do all the heavy lifting to meet a 2030 target on the journey to net zero emissions by 2050.
Emissions from the transport and agriculture sectors are forecast to increase by 2030. Emissions from stationary energy – burning fossil fuels to power mining, manufacturing, building and other processes – are forecast to remain steady. Industrial emissions are projected to decline 13 per cent.
These sectors are among the so-called “hard to abate” ones that involve high levels of emissions that are costly to reduce. Climate Change and Energy Minister Chris Bowen has announced that the next step to the interim target is to develop sectoral decarbonisation plans, including for electricity and energy, industry, the built environment, agriculture and land, transport, and resources.