Appreciating the Climate Council’s “Power Up”

The Climate Council has just launched Power Up, 10 excellent solutions that will help Australia reach our emissions reduction target and beyond. It is a great initiative that CCL can fully support. It includes boosting batteries to support renewable energy, improved fuel efficiency standards, electrifying public transport and buildings and ending fossil fuel subsidies.

The missing piece is a price on carbon. Many of these initiatives will require government funding so without a carbon price, taxpayers will end up paying - without a price on the social and environmental costs of fossil fuels, they are effectively being subsidised. Its fine for government to be paying for emission reductions if fossil fuels are fully paying their way. As long as there are subsidies making fossil fuels artificially cheap then government funded-climate solutions are being weakened, undermined and in some cases made redundant!

A carbon price would make most of these solutions happen more easily and in some cases just happen, without any government intervention. The price signal would drive much of the transition in the economy with minimal government effort. And if the revenue flowing from the tax is returned to households as 'climate dividends' it would reverse the subsidy and engage citizens in decarbonsing their own lives and in turn, the wider economy.

 A third point in favour of a carbon price is that a problem as complex as climate change needs comprehensive solutions. A collection of piecemeal solutions, even really good ones will leave gaps through which emissions will continue to flow. An economy-wide carbon price is the most comprehensive policy solution for climate change. It lays the foundation for emissions reduction and enables government to focus on the hard-to-abate emissions that flow from non-fuel sources.

Much appreciation as always to the Climate Council for this initiative. We understand that carbon pricing has yet to recover from being killed off in 2014. That's why we are building our Policy Playbook,  to  point to the many ways in which carbon pricing, particularly climate dividends is essential for decarbonising as smoothly and rapidly as possible.