Achieving Environmental Sustainability through Fiscal Policy
Critical Issues in Environmental Taxation series
Edited by Larry Kreiser, Julsuchada Sirisom, Hope Ashiabor and Janet E. Milne
Chapter 9: Mandating Emission Targets Can Significantly Reduce Road Transport Emissions in Australia
JOBNAME: Kreiser IX PAGE: 3 SESS: 34 OUTPUT: Wed Aug 24 14:42:29 2011 9. Mandating emission targets can signiﬁcantly reduce road transport emissions in Australia Anna Mortimore In 2003, the Australian government and the Federal Chamber of Automotive Industry (FCAI) reached a third agreement to improve fuel efﬁciency of all new passenger vehicles powered by petrol, by setting a voluntary target of 6.8 l per 100 km by 2010, which is equivalent to an emission target of 159 g CO2 per kilometre. Australia failed to meet its third voluntary fuel efﬁciency target, illustrating that voluntary fuel efﬁciency targets do not work. The FCAI introduced an emission target of 222 g CO2/km by 2010, which was not agreed to by the Australian government. In 2009, the Final Report by the Vehicle Fuel Efﬁciency Working Group recommended mandating emission targets. However, the May 2010 Final Report of Australia’s Future Tax System stated that such targets are not required if a cap and trade system, known as a carbon pollution reduction scheme (CPRS), is introduced, as supplementary policies such as regulations will not achieve more abatement than the CPRS alone. In September 2010, the Australian government expressed commitment to introduce mandatory emission targets, but not until 2015. This chapter examines whether a CPRS would have signiﬁcantly reduced road transport emissions when fuel price increases can be inelastic and consumer behavioural anomalies may lead to market failure or whether a command and control regulation emission standards...
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