Ambitious pitch for climate reform by taxing fossil fuels is ‘Australia’s opportunity’

Professor Rod Sims and
Professor Ross Garnaut have unveiled a plan to raise $100 billion annually to help deal with the costs of climate change.

Professor Rod Sims and Professor Ross Garnaut have unveiled a plan to raise $100 billion annually to help deal with the costs of climate change. Photo: AAP

“Everyone’s a winner, except the fossil fuel industry.”

That’s the nexus of an ambitious pitch by former consumer watchdog chair Rod Sims and economist Ross Garnaut at the National Press Club (NPC) on Wednesday for reform centred on climate action.

Their suggested “carbon solution levy” would involve taxing fossil fuels at the point of export to compensate for the rising costs of climate change.

Garnaut said that the changes might seem radical, but the levy would affect only about 100 businesses, such as BHP Group, Fortescue Metals and Woodside Petroleum, while raising more than $100 billion each year.

“We know that a general requirement for polluters to pay for the cost they impose on others is impossible in contemporary Australia,” he said.

“But not as impossible politically as accepting continued stagnation and decline in living standards.”

Garnaut said investing 5 per cent or more of national income – a similar amount to what was injected into mining during the “China resources boom” from 2002 to 2012 – into zero-carbon industries would help turn Australia into a renewable energy superpower.

Becoming a ‘superpower’

Alongside the levy, Garnaut and Sims pair put forward 15 policy recommendations that ranged from ensuring Australian industries meet European regulations for tariff-free trade to creating publicly funded hydrogen storage and transport.

Sims said failing to reduce emissions would damage Australians’ prosperity and quality of living.

“Basic economics means that you must price the damage that fossil carbon imposes on us all,” he said.

“Today, we are putting a market mechanism to deal with climate change back on Australia’s agenda.”

Sims, a former head of the Australian Competition and Consumer Commission, now chairs The Superpower Institute.

It is an organisation founded by Garnaut to “change the narrative on the economy and climate change” in Australia and place climate policy at the centre of economic reform.

During questions after Wednesday’s speech, Sims beat back accusations that TSI was a “teal think tank”, due to Climate 200 founder Simon Holmes a Court being one of its directors.

“Any time anyone mentions any increase in any tax whatsoever, they get jumped on,” he said.

“It’s nothing so much about the proposals put forward, it’s just the dynamics of political debate.”

Climate 200 founder Simon Holmes a Court watched the speech. Photo: AAP

And jumped on it was, with the Minerals Council of Australia, representing the interests of the mining industry, quickly claiming additional taxes would “seriously undermine international competitiveness and result in job losses across the country”.

Public support

A survey by the Australia Institute, concurrently released during the NPC speech, found that 52 per cent of people support a tax on fossil fuel exports regardless of size.

Only 21 per cent oppose such a measure.

Garnaut said the transition to net-zero emissions was “Australia’s opportunity”.

“Other countries do not share our natural endowments of wind and solar energy resources, land to deploy them, as well as load to grow biomass sustainably,” he said.

“Our main message today is that export of zero-carbon goods can underpin a long period of high investment, rising productivity, full employment and rising incomes in Australia.”

Garnaut touched on political and community opposition to renewables and said those uninterested in hosting infrastructure would not be forced to.

“No one needs to cover good farmland with solar panels, no one needs to have wind turbines or solar panels on their land if they don’t want to,” he said.

“Most of the superpower industries will be located well away from the current electricity grid.”

Stay informed, daily
A FREE subscription to The New Daily arrives every morning and evening.
The New Daily is a trusted source of national news and information and is provided free for all Australians. Read our editorial charter
Copyright © 2024 The New Daily.
All rights reserved.