Clean Energy Future

A carbon price is an effective and efficient way to reduce carbon pollution and move towards a clean energy future. Putting a price on carbon pollution is the first element of a clean energy future. A carbon price is the most environmentally effective and cheapest way to reduce pollution.

View the below animation which outlines some of the benefits of a carbon price.

A carbon price puts a price tag on carbon pollution. Under the carbon pricing mechanism, Australia’s biggest polluters will be required to pay for each tonne of pollution they release into the atmosphere. This will create economic incentives to reduce pollution in the cheapest possible ways. These incentives will flow through the economy. The carbon price will also make lower‑polluting technologies, especially clean energy technologies, more competitive by boosting investment in these technologies. In this way, introducing a price on carbon will trigger the transformation of the economy towards a clean energy future.

Our economy will continue to grow strongly with a carbon price in place. Treasury modelling estimates that under a carbon price:

• Incomes grow: Gross National Income per person increases from today’s levels (around $56,000) by about $9,000 per person to 2019–20. By 2050, the increase is expected to be more than $30,000 per person in today’s dollars.
• Jobs grow: national employment increases by 1.6 million jobs by 2020.
• Pollution falls: Growth in domestically produced carbon pollution slows.
• Large‑scale renewable energy (excluding hydro) is projected to be 18 times its current size by 2050. Total renewable generation (including hydro) will comprise around 40 per cent of electricity generation in 2050.
• Gas‑fired electricity increases by over 200 per cent by 2050.

For more information about the key elements of the carbon pricing mechanism, see chapter three of the Clean Energy Plan.