It’s time to dust off the carbon tax to make a real dent in emissions
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Carbon pricing is crucial to deliver the greatest reduction in emissions, according to a study by researchers at The Australian National University (ANU) and Macquarie University.
The study examined 142 countries since the commencement of carbon pricing in the 1990s and found that those with carbon prices had lower annual emissions that those without.
43 of the countries examined had a carbon price of some type by the end of the study period.
“On average, carbon dioxide emissions fell by two per cent per year over the period 2007–2017 in countries with a carbon price and increased by three per cent per year in the others,” co-author Associate Professor Paul Burke said.
“Our study finds that about two percentage points appear to be due to the carbon price and the remainder is attributable to other factors – including improving technologies, renewable energy policies and differences in fuel tax rates.”
Fellow co-author Professor Frank Jotzo said the findings were a strong message to governments all over the world that carbon pricing must be part of their plans to reduce emissions.
“Australia’s emissions from fossil fuel combustion fell during 2012–14 when the carbon pricing mechanism was in place, then rose again and flatlined to 2019.”
The Business Council of Australia, which had previously opposed the carbon tax, now supports a market-based carbon price to drive the transition to low and no-emissions technology.
Major companies have also been facing greater scrutiny from their shareholders about their emissions, leading BP and Eni to commit to reducing their emissions by 2050.
However, the current Australian government has been resistant to implementing a carbon tax, opting instead to focus on technologies to reduce emissions.
It recently accepted recommendations of a recent review into the Climate Solutions Fund that includes amending legislation to “enable a method to be developed for carbon capture and storage (CCS)”.
CCS involves the capture of carbon dioxide emissions and then transporting it to a suitable storage site for long-term storage deep underground, often by injection into a spent oil or gas field.
While this is hardly new technology, there are currently no unsubsidised CCS projects in the world and there are numerous issues with implementing the technology.
This is clearly demonstrated by the technical issues that even a multi-national company like Chevron has faced with implementing CCS for its giant Gorgon liquefied natural gas project.