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‘Technology, not taxes’: Why not both?
The government has joined the rest of the world in looking to offset carbon emissions, albeit through technology, not taxes, despite the possibility that positive taxes and incentives could potentially help Australia transition to net zero, two researchers have said.
‘Technology, not taxes’: Why not both?
The government has joined the rest of the world in looking to offset carbon emissions, albeit through technology, not taxes, despite the possibility that positive taxes and incentives could potentially help Australia transition to net zero, two researchers have said.
Prime Minister Scott Morrison continued his pledge to address global warming through technology, not taxes, in response to the damning report set out by the Intergovernmental Panel on Climate Change (IPCC), which suggested Australia could bear the brunt of climate change.
According to researchers, one of the key ways in which Australia could reduce its carbon emissions would be by transforming to more carbon-friendly vehicles and technologies.
Around the world, governments and automakers are promoting EV as a key technology to curb oil use and fight climate change.
During the 2020 presidential debate, Joe Biden pledged to transition the US away from the oil industry. Alongside Mr Biden’s pledge, Europe is fast becoming the driving force in its support for EV, pledging GBP 2.4 billion to help support this transition.
While various states around Australia have announced incentives for EVs, Australia’s federal government has only added $25 million in projects to accelerate the technological change.
Researchers Dr Diane Kraal and Dr Anna Mortimore from Monash Business School believe Australia could do more and catch up with the rest of the world, using both a technology and positive tax approach to increase EV production.
According to the researchers, transportation is responsible for nearly a fifth of Australia’s total CO2 emissions, with electric vehicles believed to play a paramount role in reducing these emissions.
As such, the two doctors believe Australia should target the business fleets, transforming them to cleaner energy, as “it would be a huge step forward in national energy reduction”.
“In 2020, Australian business fleets acquired mostly petrol and diesel vehicles, resulting in the sector producing a higher weighted average CO2 emissions, 185 grams of CO2 emission per kilometre, 41 per cent higher than Europe in 2018.
“Given business fleets make up the majority of passenger and light commercial cars on the road, we feel there’s greater impact in focusing on fleet vehicles,” Dr Kraal said.
Currently, Dr Kraal and Dr Mortimore are examining the increased take-up of battery electric vehicles or BEVs in fleets overseas, an area in which Australia lags behind much of the world.
“Currently, BEV technology is not affordable in Australia, and workplace charging infrastructure is either low or non-existent,” Dr Mortimore said.
“The UK, France, Germany, Denmark, Norway and Italy all have a significant penetration of BEVs, when compared to Australia, as a result of government tax support,” Dr Kraal adds.
The researchers added that the future of low emissions transport is BEV, and Australia needs to be ready.
“The Australian government has already acknowledged that business fleets are an effective pathway for early adoption of electric vehicles. However, there needs to be clear guidance on how to implement incentives and how new technologies will be treated from a taxation perspective for those that use their vehicles for business purposes,” Dr Kraal concluded.
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