Climate change — moving to a clean energy future

The Government will put a price on carbon to drive investment in clean energy, transforming our economy and securing future competitiveness.

Tackling climate change

Australia is one of the world's top 20 polluters, releasing more pollution per person than any other country in the developed world — including the United States.

Many other countries are already cutting their pollution levels. For example, 32 countries and 10 US States already have emissions trading schemes.

The carbon price will work by putting a price on every tonne of pollution produced. Less than 1,000 companies — the largest polluters in our economy — will be required to pay.

The Government will use every cent raised from the carbon price to assist households, support jobs in the most affected industries, and to encourage the transition to a clean energy future.

Households will receive generous assistance to meet the costs that may be passed on — more than 50 per cent of the revenue will be used to assist households. Pensioners and low‑income households will be a priority, with millions of households expected to be better off. The assistance will be permanent.

As all revenue raised will be used to assist households and businesses and fund climate programs, the scheme will be broadly budget neutral.

The Government is considering the details of the carbon pricing mechanism. The impact on the budget will be reported in the next budgetary update after the scheme's design has been finalised.

Reforming the valuation of car fringe benefits

The Government will also reform the fringe benefits tax valuation of car benefits. This will remove the unintended tax incentive for people to drive their vehicle further than they otherwise would in order to obtain a larger tax concession, and in the process burn more fuel.


Graph - Total greenhouse gas emissions 2005

Total greenhouse gas emissions (2005) ‑ Australia is one of the biggest per capita carbon polluters in the world