Climate Policy

Why Policy? An Overview of Policy

Good Policy is the Best Way to Solve Global Warming

Pricing pollution at its source is the most effective way to reduce emissions whilst increasing the welfare of Australia’s economy.
Global challenges require global action to create meaningful change. We must organise, collaborate and coalesce to implement necessary policy change.
Our government is the only agent with enough power to adequately address global warming and balance corporate power. Change is always possible.

CCL's Current Climate Position

Our current thinking about the best way forward for a safe climate

2 Legs of Global Warming

We used to think it was all about carbon – now we know that the water cycle is just as important

Policy Playbook

Various articles about the why, the how and the value of pricing pollution

Our Climate Position

The Australian Pollution Price – The Policy that Economists and Citizens Love

Policy Features Put Simply

One Price on Pollution: The Australian Pollution Price (APP) directly charges coal, oil and gas producers for the pollution embedded in their products.. They will pay $123.00 AUD for every tonne of carbon dioxide their products will emit into our atmosphere.
Dividends for Everyone: 100% of the net revenue is shared among Australian households as Australian Climate Dividends (ACDs).
Border Adjustments: To protect our businesses, carbon intensive imports pay the equivalent carbon fee already being used around the world. This is the Australian Border Adjustment Mechanism (ABAM).
Stop Citizen Subsidies: The price of fossil-fuelled pollution is embedded into almost everything we purchase. We pay the price whilst producers rein in egregious profits – it’s time the costs of pollution were included in the price so we can stop subsidising their production.

“The Biggest Thing we do is put in place a Carbon Price”

Mike Cannon-Brooks, CEO, Atlassian. 7th Nov 2018.

The Australian Pollution Price in Detail

“CCLA advocates for an economy-wide, revenue-neutral, non-inflationary carbon price to decarbonize the Australian economy: an Australian Pollution Price (APP), applied to fossil fuels at source – mine, well or the border – with revenue returned to households as Australian Climate Dividends (ACD). When applied to imports from administrations without an equivalent pollution price, APP would serve as an Australian Border Adjustment Mechanism (ABAM). The EU CBAM, now in full operation, has set a precedent with a price equivalent to AU$123/t CO2-e.”

The APP builds on the Australian Climate Dividends proposed by UNSW in 2018 and endorses The Superpower Institute’s Polluter Pays Levy (PPL) and Fair Share Levy (FSL) introduced in 2026.

Source: CCLA Climate Position 2026

Why a Dividend is Better than a Plain Tax

First, simplicity: Pricing the pollution in fossil fuels and returning it to citizens is much simpler than the current confusion of complex, piecemeal policies with high regulatory burden. Simpler policies have higher levels of transparency and integrity.
Second, political will: Receiving cash in the bank every month means people across the political spectrum will feel more inclined to support the policy as it eases mounting cost of living pressures and makes them partners in decarbonising the economy.
Thirdly, effectiveness: Taxing fossil fuel corporations increases the cost of fossil fuel products for citizens and would fall unequally on those least able to afford it.The dividend paid to households makes it possible for governments to steadily raise the price towards the actual cost of carbon – $200.00 AUD/tonne of CO2 – without increasing cost of living as the dividend offsets any increase in necessary consumables that rely on fossil fuels. Thus, ACDs are the best way to reduce emissions whilst keeping the economy and society stable.

How much will Pollution Pricing Effect Our Economy?

In the case of petrol or diesel, for example, each $1 per tonne increase in the carbon fee would mean a rise of approximately 0.25 cents on the price of one litre of petrol. So, if the carbon fee started at $15 per tonne and rose by $10 per year, petrol would go up by about 5 cents per litre the first year and slightly over 3 cents each year thereafter.

If the APP or PPL were implemented in 2026 (APP: $50.00 AUD initial fee. PPL: $17.00 AUD initial fee), the petrol price for Australians would increase 4.6 cents/L and 6.6 cents/L per year until reaching a total 30.75 cent/L increase in 2030 when both fees increase to $123.00 AUD per tonne of CO2 emitted to match the EU CBAM. The time frame allows producers, corporations and consumers to adjust to Australia’s transition to Net Zero, see Figure 2, from CCLA Climate Position, 2026.

Electricity and gas produced from fossil fuels will become more expensive, but renewable energy will not be affected and will become cheaper over time. Fees from our proposed and endorsed policies will accumulate to at least an average of $35 billion each year towards net zero, ensuring the long-term prosperity of Australians and their future industries – see Figure 4, from CCLA Climate Position, 2026.

Source: The Superpower Institute report, The Case for Pricing Pollution

One Price on Pollution

How does putting a price on pollution work?

Producers would pay a fee on the carbon content of fossil fuels wherever they enter the economy, the mine, well, or port.

The APP would start at $50.00 AUD per ton of CO2 and increase from there. The rising fee gives a powerful incentive to industry, consumers and investors to choose low to zero carbon alternatives.

This approach is considered by most economists the fastest and most effective means to decarbonise our world.

Is a “pollution fee” just a tax under a different name?

It will inevitably be called a tax by those who wish ot undermine it. But the fact that it is a levy on the costs to society that the industry is externalising makes it different to most taxes. Many taxes tax goods, this fee is pricing ‘bads’.

How does a carbon price compare to cap and trade?

Cap and trade is a market mechanism that enables polluters to trade amongst themselves and with others. It enables traders to make money and extract value from the market. Less benefit accrues to citizens.

Dividends for Everyone

What is a Climate Dividend?

It would look like a simple monthly direct deposit.

Our tax office would be in charge of sending money to all eligible Aussies each month. You can use it to cover the cost of rising fossil fuel prices, or save money by buying low-carbon alternatives.

Does a dividend affect all Australians the same way?

No. The net benefit for each household will depend on its reliance on carbon-intensive products. Of course, after the implementation of our policies, the price of carbon-intensive products will increase. Furthermore, consumption is intrinsically linked with income, and higher income households generally consume more carbon-intensive products such as petrol, gas, electricity, flights etc… The dividend increases equality because households are paid the same and thus if you have more wealth, you are encouraged to invest in more renewable sources.

In the 2018 paper linked above, Prof. R. Holden and R. Dixon from UNSW modelled the effect of a climate dividend on Australian society. They found that three-quarters of households will gain from the scheme. Moreover, the economic benefits were found to be the highest for households in the lowest income bracket.

The dividend ensures that those least able to afford the transition are able to participate in decarbonising their economy.

Some people may have to use carbon-intensive products, such as tradies and rural people who need to drive far distances for work, or small businesses for bills. That’s why we endorse the Superpower Institute’s PPL because it allocates $490 – $1,300 pa to disadvantaged households and $325 pa to ~1m eligible small businesses.

Why is a dividend good for nonpartisan political support?

The dividend should make the pollution price attractive to all parties due to fact that if electors are sufficiently well-informed most will be in favour. The influence of vested interests on parties inevitably overrides this advantage for some parties.

Border Adjustment

What is a border adjustment?

A price on the carbon content of imports that protects Aussie industries from unfair competition from countries that do not price pollution. And a rebate to our industries exporting to such countries

Would a carbon fee hurt Australian businesses in the global economy?

No., not if an effective border adjustment is legislated at the same time.

Simple Regulation

Is it expensive to administer a carbon fee?

No. Less than 100 companies would be liable to pay their fee to the ATO. This is so simple compared to the complex and expensive processes involved in the Safeguard mechanism and many other climate policies.
Distributing the dividend would require some expense, estimated between 1 and 2 per cent of the revenue raised.

Would legislation be fair to business, farmers, manufacturers and utilities?

Yes. Businesses can pass on any extra costs they incur to the consumers knowing that the dividend more than covers the extra cost.
The Superpower Institute’s PPL allocates $490 – $1,300 pa to disadvantaged households . It will alsl allocate $325 pa to ~1m eligible small businesses.

The Policy Playbook

Climate policy and pollution pricing – from the basics to the complex stuff.

This Playbook can be used as a self-paced learning tool for anyone who wants to get a grasp of the efficient and rational policies that are needed to address climate change and bring greenhouse gas emissions down quickly, smoothly and safely.

Work through it at your own pace and preferably, link up with friends or colleagues who might like to learn with you. When you feel you know enough have a look at the Lobbying Playbook which shows you how to form a group and get started lobbying your MP and other people of influence.

The true cost of fossil fuels

Historically fossil fuels were cheap – they helped Australia develop into the prosperous nation it is today. However, the threat of climate-related events driven by greenhouse gases emitted when fossil fuels are burned, and by major disruptions to the water cycle from de-vegetation and other land use changes means decarbonising our economy is both urgent and critical.

The current market price of fossil fuels excludes the negative externalities of the environmental, social and economic damage that pollution has caused over the past century and continues to cause. This is disparity is obvious in the graphic below:

Infographic created by Sachiko Metzner for CCL (8 July 2026) from content of:

Black, S., Parry, I. and Vernon-Lin, N. (2023) Fossil fuel subsidies surged to record $7 trillion. IMF Blog, 24 August. Available at:
https://www.imf.org/en/blogs/articles/2023/08/24/fossil-fuel-subsidies-surged-to-record-7-trillion
(Accessed: 13 July 2026).

Skeptical Science (n.d.) The true cost of fossil fuels. Available at:
https://skepticalscience.com/print.php?r=364
(Accessed: 13 July 2026).

Union of Concerned Scientists (2008) The hidden costs of fossil fuels, 15 July. Available at:
https://www.ucs.org/resources/hidden-costs-fossil-fuels
(Accessed: 13 July 2026).

The Australia Institute (n.d.) Coal Mine Tracker. Available at:
https://australiainstitute.org.au/initiative/coal-mine-tracker/
(Accessed: 13 July 2026).

Right now, citizens are subsidising climate change. It’s hurting our economy:

“Damage-related loss in value is expected to rise to $571 billion by 2030, $611 billion by 2050 and $770 billion by 2100 at GWL +3.0°C” (Steffen et al. 2019).

“Cumulative wealth loss in Australia from reduced agricultural and labour productivity from climate change could exceed $4.2 trillion by 2100 at GWL +3.0°C” (Steffen et al. 2019).

The Colvin Review modelled scenarios for the increased severity and frequency of extreme weather events 2049-50, due to induced by global warming. They found that under only a moderate emissions pathway, there is a 5% chance that any year produces insured losses greater or at the values represented below:

Department of Climate Change, Energy, the Environment and Water (DCCEEW) (n.d.) National Climate Risk Assessment. Australian Government. Available at:
https://www.dcceew.gov.au/climate-change/policy/adaptation/ncra
(Accessed: 15 July 2026).

Steffen W, Mallon K, Kompas T, Dean A, Rice M. Compound Costs: How Climate Change is Damaging Australia’s Economy [Internet]. Climate Council of Australia Limited; 2019 [cited 2026 Jul 11]. p. 26. Report no.: 1. Available from:
https://www.climatecouncil.org.au/wp-content/uploads/2019/05/Costs-of-climate-change-report.pdf

Colvin A, O’Donnell T, Millen S. Independent Review of Commonwealth Disaster Funding Final report [Internet]. 2024. Available from:
https://www.nema.gov.au/sites/default/files/2024-10/Independent%20Review%20of%20Commonwealth%20Disaster%20Funding%20-%20Accessible%20Final%20Report.PDF

Piecemeal Policy

Setting emissions reductions targets is important, but they are merely targets. To action emissions reduction, comprehensive , rational policy has to be implemented. The government’s current sector-by-sector, piecemeal (as seen in the graphic below), often symbolic, approach is too slow and inefficient. It takes time to implement and increases administrative burden; the more policies you implement, you increase the surface area for blame to be shifted rather than real reduction to occur, and create cracks through which regulation can be undermined.

Burfurd, I. and Finighan, R. (2026) Carbon Pricing’s Second Chance. Inflection Points, 21 June. Available at:
https://inflectionpoints.work/articles/carbon-pricings-second-chance (Accessed: 3 July 2026).

Overview of Australian Carbon Credit Units (ACCUs)

Carbon Credit Units (ACCU or equivalent) have a useful role to play as rewards for reducing or avoiding pollution and for drawing down historical emissions. But their use as CO2 offsets for emissions totally negates their value. Namely, every tonne of CO2-e emitted WILL damage the environment for millennia, while a tonne of CO2-e CLAIMED to have been avoided or sequestered by an ACCU-e MAY be valid for decades. Any project, against which offset certificates are created, has a much shorter terrestrial life (if any) than the life of the atmospheric pollution it purports to offset. ACCUs are sometimes gifted by simply not logging existing forest, AKA not making any change! Ultimately, using carbon credit as carbon offsets increases pollution levels over time.

This is the process of obtaining, trading and surrendering ACCUs:

Infographic created by Sachiko Metzner for CCL (12 July 2026), adapting Clean Energy Regulator (2026) Australian carbon credit units. Available at:
https://cer.gov.au/schemes/australian-carbon-credit-unit-scheme/australian-carbon-credit-units (Accessed: 9 July 2026).

Overview of the Safeguard Mechanism

According to the Clean Energy Regulator, the Safeguard Mechanism requires Australia’s highest greenhouse gas emitting facilities to reduce their emissions in line with Australia’s emission reduction targets of 43% below 2005 levels by 2030 and net zero by 2050.

It aims to incentivise carbon abatement; however, the option to 100% “offset” is both legal in Australia (whereas in the EU is capped at 6% of reported emissions) and significantly cheaper for businesses. Carbon offsetting (done here through ACCUs) is a scientifically unfounded, opaque and administratively onerous way of “reducing” emissions. So, the Mechanism at best plateaus pollution, but more commonly increases it as facilities are able to produce unlimited emissions under the baselines, to the detriment of other Safeguard facilities, the environment and Australians. Furthermore, the Mechanism raises no revenue, rather incurring substantial cost to maintain the Regulator that manages it.

Overview of Land Use, Land-Use Change and Forestry (LULUCF)

Under international carbon accounting, LULUCF is the only sector that can act as both an emission source (e.g., deforestation) and as an emission sink (e.g., forests absorbing carbon dioxide). It aims to offer short-term climate change mitigation potential while providing food, wood and other renewables, and helping ecological conservation.

However, its use in climate policy has been controversial since its recognition at the 1997 Kyoto Summit. This is because it is the sector in which carbon credits are created, and so, allows countries to disguise slow decarbonisation progress in reporting. For example, Australia’s claimed carbon emissions with LULUCF offsets have reduced about 24.5% below 2005 levels, whereas without, have only reduced by 3.8%.

UNFCCC (2026) Land Use, Land-Use Change and Forestry (LULUCF). Available at: https://unfccc.int/topics/land-use/workstreams/land-use–land-use-change-and-forestry-lulucf (Accessed: 16 July 2026).

Overview of the Environmental Protection and Biodiversity (EPBC) Act 2012

The EPBC act is designed to recognise and protect ‘Matters of National Significance’ (DCCEEW 2025). These include endangered, threatened, or iconic native species of flora and fauna as well as heritage listed landscapes or ecological communities. The environmental offsets policy amendment was introduced in 2012. It determines that suitable offsets for a project can be the “[improvement] of existing foraging habitat for the species, and/or protecting existing foraging habitat.”

Of the 174 cases with known outcomes:

Only 30% of the offset sites are in fact adequately protected.
A further 48% are poorly protected because the protection is not permanent, easily revoked, or not suitably directed towards conservation.
Forty-two offset sites were excluded from the study because it could not be ascertained whether they were protected (ACF 2024).
Half of the approval holders for these sites were state governments who did not know the location of some sites, let alone if they were adequately preserved.
Over a third of the cases did not require the approval holder to report publicly or to the Environmental Minister on their progress in protecting their offset site (ACF 2024).

ACF (2024) Set and forget: How offsets under national environmental law drive habitat destruction. ACF, 1, p. 23 of 34. Available at: Set and forget (Accessed: 24 September 2025).

DCCEEW (2025) EPBC Act reform. Department of Climate Change, Energy, the Environment and Water. Available at:
DCCEEW (Accessed: 24 September 2025).

Overview of Petroleum Resource Rent Tax (PRRT)

Infographic created by Sachiko Metzner for CCL (15 July 2026), adapting The Australia Institute (2025) What is the PRRT?. The Australia Institute. Available at:
https://australiainstitute.org.au/post/what-is-the-prrt/
(Accessed: 13 July 2026).