The Prime Minister’s Multi-Party Climate Change Committee will soon begin to release further details about the carbon pricing mechanism that is planned to start from July 2012. We know that the initial three to five year period of the mechanism will be based on a fixed carbon price, and a market-based fluctuating pricing mechanism will be implemented thereafter, but beyond that, a lot more detail is required before we can fully understand the whole policy initiative.
But the implementation of a price on carbon - whether fixed or fluctuating - will not achieve the desired outcomes on its own.
To complement the pricing mechanism, the federal government will need to give consideration to the role that other tax policies should play in the future as part of the big picture policy.
One area to consider could be how to provide incentives for businesses and workers to move to regional areas where new large-scale renewable infrastructure might be built. One strategy might be to provide an investment allowance or research and development concession for those businesses. This could be in combination with new zone tax offsets for workers to encourage them to move out of the cities to these locations. Bringing new businesses and workers to regional communities is a good thing at both an economic and social policy level.
If we are going to approach the climate change challenge comprehensively, then the government must put in place a big picture solution that encompasses a number of policy strategies.
Stay tuned over the next few weeks as the pressure builds in Canberra. The policy debate around the price on carbon looks set to climax soon.
Further information about the Institute’s position on carbon pricing will be available over the coming days.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment