Carbon Pollution Reduction Scheme: Australia's Low Pollution Future
White Paper15 December 2008
Foreword
Climate change poses a substantial threat to Australia's economy and our way of life.
Australia faces a choice. We can either wait and leave our children and grandchildren to face the full impacts of climate change, or we can take responsible action now by investing in the industries and jobs of the future.
Why we need to act
As a hot and dry country, we have more to lose than any other developed nation if the world fails to reduce the carbon pollution that causes climate change.
We are already feeling the impacts of climate change in Australia and across the globe. In the past twelve years, we have experienced eleven of the hottest years since records began and temperatures are projected to continue to rise over the next century.
In Australia, temperatures are expected to rise by around five degrees by the end of the century. Coastal properties will be threatened by rising sea levels and tidal surges. Food production from our farms will be reduced as a result of longer, more frequent and more intense droughts. National treasures, including the Great Barrier Reef, Kakadu wetlands and the big tourism industries they support will be under threat.
That's why we need to act decisively to protect our way of life and the Australian economy.
Climate change and the global financial crisis
The world is currently confronting the worst financial crisis in three quarters of a century, but this does not mean we can ignore the threat climate change poses to our long term economic prosperity. On the contrary, this current crisis makes it more important we secure the long term prosperity that comes from building the low pollution economy of the future.
It is often easier for governments to focus on immediate circumstances at the expense of long term challenges, but ignoring these challenges only makes them worse. Analysis from the Australian Treasury and Professor Ross Garnaut demonstrates the longer we wait to take action on climate change, the more it will cost.
The Australian Government will continue to act decisively to protect Australia from the worst effects of the global financial crisis while also addressing the long term challenge of climate change.
The Government is determined to get the balance right. This means securing Australian jobs and assisting households today, while at the same time moving to the low pollution economy that will create the jobs of the future.
The low pollution economy of the future
The Carbon Pollution Reduction Scheme as set out in this White Paper is the foundation of the Australian Government's whole of economy strategy to tackle climate change.
Implementing the Scheme represents the biggest structural economic reform since the opening up of Australia's economy in the 1980s and 1990s.
For the first time, the Scheme will make industries pay for the carbon pollution they generate and there will be a limit on Australia's contribution to global carbon pollution.
The work of the Treasury and Professor Garnaut confirms that this responsible economic reform will enable Australia to reduce carbon pollution while continuing to grow our economy and incomes. Introducing a cost on carbon pollution will drive investment in new technologies and create the jobs of the future. For example, Australia's transition to a low pollution economy is expected to see the renewable energy industry grow to around 30 times its current size by 2050. Growth in this industry alone will provide significant job opportunities for Australians.
Taking responsible and decisive action on climate change is crucial to our economic prosperity now and for the future.
Targets for reducing Australia's carbon pollution
The Australian Government has a substantial commitment to reduce our carbon pollution by 60 per cent of 2000 levels by 2050.
By 2020, we have committed to reduce Australia's carbon pollution by up to 15 per cent below 2000 levels in the context of a global agreement where major economies agree to substantially restrain carbon pollution and advanced economies take on reductions comparable to Australia.
We have also committed to an unconditional 5 per cent reduction in carbon pollution below 2000 levels by 2020, which represents a significant cut of around 27 per cent on a per capita basis.
By harnessing the innovation and efficiency of the market, the Carbon Pollution Reduction Scheme will allow Australia to meet these serious targets at the lowest overall cost to our economy.
Assistance for households and business
The Government will reinvest every cent it raises through the Carbon Pollution Reduction Scheme to build the low pollution economy of the future and to help Australian households and businesses adjust. Unfortunately, there is no cost-free way to tackle climate change. There will be a modest increase in the overall cost of living when the Scheme is introduced, with an increase in household electricity bills of around $4 per week if the carbon price is $25.
This White Paper sets out a comprehensive new package of financial assistance for Australian households worth around $6 billion a year on going. This assistance will be available from the commencement of the Scheme in 2010.
In addition, the Government will assist motorists through a cent for cent reduction in fuel tax for the first three years of the Scheme. This means households and business will be shielded from increases in the cost of fuel resulting from putting a cost on pollution.
We will invest a further $2.15 billion over five years to help business, community sector organisations, workers, regions and communities adjust to a low pollution future through the new Climate Change Action Fund.
To secure the jobs of today, the Government will provide substantial assistance to Australia's important emissions intensive-trade exposed industries. This assistance will enable these industries to move to a low carbon economy and will support their continued growth here in Australia.
Helping to shape a global solution
Everyone needs to do their bit to tackle carbon pollution. In this White Paper, we have outlined Australia's significant medium and long term targets for cutting carbon pollution.
We recognise that reaching a comprehensive and ambitious global agreement will be tough, but Australia stands ready to ensure we play our part in the global effort.
By introducing the Carbon Pollution Reduction Scheme, Australia will join other developed nations in the fight to reduce carbon pollution. Emissions trading is already underway in 27 European countries and the Government welcomes President-elect Obama's commitment to introduce an emissions trading scheme in the US.
Market based economic reforms like the Carbon Pollution Reduction Scheme are a critical part of global leadership on climate change.
Demonstrating that we can make real cuts to Australia's carbon pollution while continuing to grow our economy will encourage other countries to join the global fight.
This is not the time for delay
While difficult, the Australian Government is determined to get the balance right in tackling climate change. The Carbon Pollution Reduction Scheme will build the low pollution economy of the future, secure the jobs of today and protect our uniquely Australian way of life.
http://www.climatechange.gov.au/whitepaper
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