1. Fiscal policy settings for clean energy
Dr Paul Burke
Australian National University
@burke_ec
ANU Energy Change Institute
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2. Window tax What happens if you tax windows?
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3. Smart taxes can be put to work to help the environment
Economic theory says that taxes should be set equal to the cost of external damage caused
Taxman

4. Carbon tax has various benefits
Reduces pollution
Encourages clean energy
Raises revenue
Cheap to collect, as there are few taxpayers
Reduces the need for some other policies
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5. Goal of a carbon tax Emissions Business as usual Index Green growth
GDP

6. Tax and relax
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7. Australia’s carbon pricing experiment
Changes in emissions from the electricity sector
Carbon price
Introduced
Removed
Megatonnes of CO2-e
Years are fiscal. Source: NGGI September 2015

8. Indonesia’s CO2 emissions from energy use
million tons CO2
Source: IEA

9. Coal 35,000 MW program 35,000 MW of new capacity by 2019
> 20,000 MW from coal
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10. Renewable share of electricity generation (non-hydro renewables only)%
Source: IEA

11. Consumer subsidies for fossil fuel use, 2014
($US billion)
3% of GDP
70% for gasoline & diesel
Source: IEA

12. Question
What outcomes would you expect to see if gasoline is subsidised?
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13. Fuel subsidies lead to …
More fuel use
Purchases of fuel-inefficient vehicles
Traffic jams
Pollution
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14. Indonesia’s recent fuel subsidy reforms
June 2013: Premium price increased from 4,500 to 6,500 rupiah/liter
November 2014: Increased to 8,500 rupiah/liter
January 2015: Price linked to world market
Currently: 6,450 rupiah/liter
Future reform challenge: moving to a fuel excise
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15. Impacts of 10% gasoline fuel excise
Source: Burke (various papers)

16. 2009 Green Paper Recommended introduction of a carbon tax
Potential to transition to an emissions trading scheme (ETS) in the future
Remove all fossil fuel subsidies

17. Renewable energy target Subsidies for clean energy
Policy alternatives
Carbon tax
Institutional reform
Coal moratorium
Coal tax
Renewable energy target
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Subsidies for clean energy
Feed-in tariffs

18. All the best! Dr Paul Burke Australian National University
@burke_ec