If Australia is to do its fair share in tackling climate change, then it must include a carbon pricing scheme.
That’s the verdict of the Garnaut Climate Change Review – Update 2011, which recommends that Australia’s initial carbon price be in the range of $20-$30.
According to Garnaut, Australia is a long way behind in contributing proportionally to the global response on climate change with other substantial economies – such as China, Europe and the UK – taking stronger action to reduce emissions. He believes there is “no risk” of Australia becoming a leader in reducing greenhouse gas emissions and that other countries are already too far ahead.
As such, he states a carbon pricing scheme would be critical to the country meeting commitments at the lowest cost and warned against the return of an old political culture that favours regulation over market-based approaches.
In addition, he released two supplementary notes – the first being a 10 year plan for carbon pricing revenue which recommends that 55 per cent of revenue raised from the scheme be allocated to household assistance; and 30 per cent to trade-exposed emissions-intensive industries.
The second note looks at governance arrangements and outlines institutional and administrative arrangements that will support carbon pricing including: an independent committee to advise on targets; an independent carbon bank to regulate carbon pricing; and an independent agency to develop recommendations for industries.
