Cashing in on carbon reduction

In November last year, as part of the University of New South Wales’s Grand Challenge on Inequality, we launched the Australian Carbon Dividend Plan, which was designed to tackle the twin problems of climate change and energy affordability. The idea is simple: put a $50 per tonne tax on all carbon at the point where it enters the economy, and return the proceeds to all voting-age citizens on an equal basis. Australians will have an incentive to reduce their emissions but will be compensated for price increases stemming from the tax.

The dividend plan provides incentives for lower-carbon energy. 

We estimate that the average Australian household would be $585 a year better off under the plan, with the lowest-earning fifth of households $1300 a year better off. And that’s before any change in their behaviour. Households that cut their energy consumption as a result of the plan would be even better off.

It’s a market-based approach to dealing with climate change that provides incentives for more efficient and lower-carbon energy, and compensates households directly in a progressive manner.

Read the Inside Story by Richard Holden and Rosalind Dixon - “Cashing in on carbon reduction.”