¹ Prime Minister of Australia, ‘Climate change framework announced’ (Media Release, 24 February 2011) <http://www.pm.gov.au/press-office/climate-change-framework-announced>. This media release includes attachment ‘Carbon Price mechanism’ (Multi Party Committee on Climate Change, 24 February 2011).

² Prime Minister of Australia, ‘Prime Minister establishes Climate Change Committee’ (Media Release, 27 September 2010) <http://www.pm.gov.au/press-office/prime-minister-establishes-climate-change-committee>, 1.

³ The Henry Review Panel, ‘Australia's Future Tax System, Report to the Treasurer, Part One Overview’ (Report, The Henry Review Panel, December 2009), vii (the ‘Henry Tax Review’).

⁴ The Kyoto Protocol to the United Nations Framework Convention on Climate Change, opened for signature 11 December 1997, 2303 UNTS 162 (entered into force 16 February 2005). Australia's commitment was to restrict its emissions growth to 108 per cent of emissions in the 1990 baseline year by the period 2008–12 (art 3 and annex B).

⁵ Australia's Kyoto-defined emissions are expected to average 107 per cent of the 1990 baseline level during the commitment period 2008-12: see Department of Climate Change (Cth), ′Tracking to Kyoto and 2020: Australia's Greenhouse Emissions Trends 1990 to 2008-12 and 2020′, (Report, Department of Climate Change, August 2009), 18 (at Table 2).

⁶ See, eg, Tom, Tietenberg, Environmental and Natural Resource Economics (Pearson Addison-Wesley, 2006)Google Scholar.

⁷ See David, Hunter, James, Salzman and Durwood, Zaelke, International Environmental Law and Policy (Foundation Press, 2nd ed, 2002) 130-41Google Scholar, and earlier works including William, Baumol and Wallace, Oates, The Theory of Environmental Policy, (Cambridge University Press, revised ed, 1988)Google Scholar; Organisation for Economic Co-Operation and Development, Economic instruments for pollution control and natural resource management in OECD countries: a survey (8 October 1999) <http://smap.ew.eea.europa.eu/fol034934/fol305501/fol830890/Eco_Instr__Pollution_Control_OECD.pdf/>; Wayne, Gumley ‘Legal and Economic Responses to Global Warming — An Australian Perspective’ (1997) 14 Environmental and Planning Law Journal 341Google Scholar.

⁸ Ole, Kristian Fauchald, Environmental Taxes and Trade Discrimination (Kluwer Law International, 1998) 29Google Scholar.

⁹ Sam H Riethmuller and Gary J Buttriss, ‘Closing the Gap Between Pro-environmental Attitudes and Behaviour in Australia’ (Paper presented at Australian and New Zealand Marketing Academy ('ANZMAC’) Conference, Olympic Park Sydney, 1-3 December 2008).

¹⁰ Thomas, Daniel Wuertenberger, ‘The Regulation of CO2 Emissions Caused By Private Households – An Analysis Of The Legal Situation In The European Union And Germany', (2009) 16 Missouri Environmental Law and Policy Review 1, 55Google Scholar.

¹¹ See, eg, European Environment Agency, ‘Market-based instruments for environmental policy in Europe’ (Technical Report No 8/2005 European Environment Agency,,26th January 2006); US Environmental Protection Agency, ‘The US Experience with Economic Incentives for Protecting the Environment’ (Report No EPA-240-R-01-001, US Environmental Protection Agency, 1 January 2001).

¹² Dorit, Kerret and Alon, Tal, ‘Greenwash or Green Gain? Predicting the Success and Evaluating the Effectiveness of Environmental Voluntary Agreements’ (2005) 14 Penn State Environmental Law Review 31Google Scholar.

¹³ These schemes were not entirely ‘voluntary’ as they were supported by financial assistance, advice and local government rate relief to landholders. See Natalie, P Stoianoff and Andrew, H Kelly, ‘Conserving Native Vegetation On Private Land: Subsidizing Sustainable Use Of Biodiversity?’ in Kurt, Deketelaere et al, Critical Issues in Environmental Taxation: Volume IV (Oxford University Press, 2007) 299, 306Google Scholar.

¹⁴ The Landcare movement originated in 1989 as a joint initiative between the National Farmers’ Federation and the Australian Conservation Foundation. Federal Government funding for Landcare was announced by Prime Minister Bob Hawke at the launch of the ‘Our country our future’ statement on the environment, in a speech at Wentworth, NSW on 20 July 1989. See Landcare, What is Landcare? Landcare <http://www.landcareonline.com.au/?page_id=26>.

¹⁵ Council of Australian Governments, National Greenhouse Response Strategy (Commonwealth of Australia, 1992); adopted by Council of Australian Governments, Council of Australian Governments ‘Communiqué′ 7 December 1992 (24 October 2008) <http://www.coag.gov.au/coag_meeting_outcomes/1992-12-07/index.cfm>.

¹⁶ George Wilkenfeld, Clive Hamilton and Hugh Saddler, ‘Australia's Greenhouse Strategy: Can the Future Be Rescued?’ (Discussion Paper No 3, Australia Institute, February 1995). The review found that the largest emitters in the energy industries had taken no measures to limit their emissions specifically in response to climate change, and that no new government structures or programs had been established for this purpose (at 11).

¹⁷ Advocates for a carbon tax included the Australian Conservation Foundation, ‘Energy Pricing’ (Policy Statement No 54, Australian Conservation Foundation, June 1993), the Australia Institute (see above n 16), and a Federal Government review of the urban environment: see Caroline Milburn, ‘Study Calls For Carbon Tax To Cut Emissions’ The Age (Melbourne), 27 January 1995, 3.

¹⁸ Australian Department of Environment, Sport, and Territories, Greenhouse 21C: A plan for a sustainable future (AGPS, 1995)Google Scholar; Christine, Parker, ‘The Greenhouse Challenge: Trivial Pursuit?’ (1999) 16 Environmental and Planning Law Journal 63Google Scholar.

¹⁹ Commonwealth of Australia, ‘The National Greenhouse Strategy: Strategic framework for advancing Australia's greenhouse response’ (Australian Greenhouse Office, November 1998) 34 (under Module 3: Partnerships for Greenhouse Action).

²⁰ Quoted in Senate Environment, Communications, Information Technology and Arts References Committee, Parliament of Australia, The Heat is On: Australia's Greenhouse Future (2000), 335 [8.56]-[8.57].

²¹ Christine, Parker, ‘The Greenhouse Challenge: Trivial Pursuit?’ (1999) 16 Environmental and Planning Law Journal 63, 70Google Scholar.

²² Rory, Sullivan, ‘Greenhouse Challenge Plus: More of the Same?’ (2006) 23 Environmental and Planning Law Journal 60, 73Google Scholar; see also Rory, Sullivan, Rethinking Voluntary Approaches in Environmental Policy (Edward Elgar, 2005)Google Scholar.

²³ Australian Greenhouse Office, ‘Program Guidelines: Generator Efficiency Standards’ (Australian Government, July 2000, revised 2006): <http://www.environment.gov.au/archive/settlements/ges/index.html>.

²⁴ John Howard, ‘Changes to the Goods and Services Tax’ (Press Release, 31 May 1999), which announced the ‘Measures for a Better Environment’ Package, implemented in the 2000-2001 Commonwealth Budget.

²⁵ John, Howard, Safeguarding the Future: Australia's Response to Climate Change (AGPS, 1997), 4Google Scholar.

²⁶ Senate Environment, Communications, Information Technology and Arts Reference Committee, above n 20, 126 [4.66],[4.69].

²⁷ Fauchald, above n 8, 27; Richard, Stewart ‘Economics, Environment, and the Limits of Legal Control’ (1985) 9 Harvard Environmental Law Review, 1, 9Google Scholar.

²⁸ For instance, the fitting of anti-pollution devices in vehicles is required under pt 4 div 3 cl 17 of the Protection of the Environment Operations (Clean Air) Regulation 2010 (NSW). See Robert, Hahn and Robert, Stavins, ‘Incentive-based environmental regulation: a new era from an old idea?’ (1991) 18 Ecology Law Quarterly 1, 5Google Scholar.

²⁹ Jonathan Borck, Cary Coglianese and Jenifer Nash, ‘Evaluating the Social Effect of Performance-Based Environmental Programs’ (Working Paper No 48, John F Kennedy School of Government, June 2008) 1; Fauchald, above n 8, 28. See, eg, the emission standards set in pt 4 of the Protection of the Environment Operations (Clean Air) Regulation 2010 (NSW) and Hahn and Stavins, above n 28, 5.

³⁰ See, eg, the operation of the Protection of the Environment Operations (Clean Air) Regulation 2010 (NSW).

³¹ P, Bohm and C, Russell, ‘Comparative Analysis of Alternative Policy Instruments', in A V, Kneese and J L, Sweeney (eds), Handbook of Natural Resource and Energy Economics (Elsevier, 1985) vol 1, 395–460Google Scholar.

³² Daniel, H Cole and Peter, Z Grossman, ‘When is Command-and-Control Efficient? Institutions, Technology and the Comparative Efficiency of Alternative Regulatory Regimes for Environmental Protection’ (1999), 5 Wisconsin Law Review, 887Google Scholar.

³³ Don Fullerton, Andrew Leicester and Steven Smith, ‘Environmental Taxes’ (Working Paper No 14197, National Bureau of Economic Research, July, 2008) 6.

³⁴ Howard, above n 25. This target was originally stated as 2 per cent of total electricity production, but later converted to an absolute quantity of 9500 gigawatt hours which fell well short of 2 per cent of total electricity by 2010. See, Combined Explanatory Memorandum, Renewable Energy (Electricity) Bill 2000 (Cth) and Renewable Energy (Electricity) (Charge) Bill 2000 (Cth), introduced to the House of Representatives 22 June 2000.

³⁵ Renewable Energy (Electricity) Act 2000 (Cth).

³⁶ This target was originally intended to represent 2 per cent of total electricity production, but later converted to an absolute quantity which fell well short of 2 per cent of total electricity by 2010. See, Combined Explanatory Memorandum to Renewable Energy (Electricity) Bill 2000 (Cth) and Renewable Energy (Electricity) (Charge) Bill 2000 (Cth), introduced to the House of Representatives 22 June 2000.

³⁷ Mandatory Renewable Energy Target Review Panel, ‘Renewable Opportunities, A Review of the Operation of the Renewable Energy (Electricity) Act 2000’ (Report, Mandatory Renewable Energy Target Review Panel, September 2003), 11. See also, ch 2, <http://www.mretreview.gov.au/report/index.html>.

³⁸ James, Prest, ‘Dangerous Obsession with Least Cost? Climate change, renewable energy law and emissions trading’ in Wayne, Gumley and Trevor, Daya-Winterbottom (eds), Climate Change law: Comparative, Contractual and Regulatory Considerations (LawBook, 2009) 179, 191Google Scholar.

³⁹ The RET is implemented primarily through amendment to the Energy (Electricity) Act 2000 (Cth), Renewable Energy (Electricity) (Large-scale Generation Shortfall Charge) Act 2000 (Cth) and the Renewable Energy (Electricity) (Small-scale Technology Shortfall Charge) Act 2010 (Cth).

⁴⁰ Department of Resources, Energy and Tourism, Energy Efficiencies Opportunities (18 March 2011) <http://www.ret.gov.au/energy/efficiency/eeo/pages/default.aspx>.

⁴¹ RECs are a tradable instrument created through solar, wind, or other renewable energy systems. Electricity suppliers may generate RECs by acquiring renewable energy directly from suppliers or simply buy them on a secondary market at the prevailing market rate.

⁴² Full details of the scheme are available at: <http://www.ret.gov.au/energy/efficiency/eeo/about/Pages/default.aspx>. Department of Resources, Energy and Tourism, above n 40.

⁴³ Council Of Australian Governments, ′National Partnership Agreement on Energy and Efficiency′ (Intergovernmental Agreement, COAG, July 2009), available at <http://www.federalfinancialrelations.gov.au/content/national_partnership_agreements/environment.aspx>.

⁴⁴ Australian Building Codes Board, ‘BCA 2010 Revised Energy Efficiency Provisions’ (Media Release, 22 Jan 2010) <http://www.abcb.gov.au/index.cfm?objectid=A22A7398-070B-11DF-B1DD001143D4D594>.

⁴⁵ See Department of Climate Change and Energy Efficiency, Minimum Energy Performance Standards Regulation in Australia (9 April 2010) <http://www.energyrating.gov.au/meps1.html>.

⁴⁶ The relevant Australian Design rules are administered under the Motor Vehicle Standards Act 1989 (Cth). See Department of Infrastructure and Transport, Australian Design Rules, (19 January 2010) <http://www.infrastructure.gov.au/roads/motor/design/index.aspx>.

⁴⁷ See Department of Climate Change and Energy Efficiency, Lighting (2 February 2011) <http://www.climatechange.gov.au/what-you-need-to-know/lighting.aspx>.

⁴⁸ See Department of Climate Change and Energy Efficiency, Commercial Building Disclosure (8 October 2010) <http://www.climatechange.gov.au/what-you-need-to-know/buildings/commercial/disclosure.aspx>.

⁴⁹ The NGERS scheme is administered by the Department of Climate Change and Energy Efficiency; see National Greenhouse and Energy Reporting (22 February 2011) <http://www.climatechange.gov.au/reporting>.

⁵⁰ See below, CPRS proposals are described in Part III.

⁵¹ Fauchald, above n 8, 25.

⁵² Ibid 26.

⁵³ T H, Tietenberg, ‘Economic Instruments for Environmental Regulation’ (1990) 6(1) Oxford Review of Economic Policy 17, 17Google Scholar.

⁵⁴ Arthur, C Pigou, The Economics of Welfare (MacMillan, 4thed, 1938)Google Scholar.

⁵⁵ Janet, E Milne, ‘Environmental Taxation: Why Theory Matters', in Milne, et al, Critical Issues in Environmental Taxation International and Comparative Perspectives (Richmond Law, 2002, vol 1), 4Google Scholar.

⁵⁶ Organisation Economic Co-operation and Development (1972) Guiding Principles Concerning the International Economic Aspects of Environmental Policies, 11 ILM 1172.

⁵⁷ Rio Declaration of Environment and Development, Annex 1 to the Report of the United Nations Conference on Environment and Development at Rio De Janeiro, 3-14 June 1992, Document A/Conf.151/26 (vol 1).

⁵⁸ Nicholas, Stern, The Economics of Climate Change: The Stern Review, (Cambridge University Press, 2007), 25Google Scholar.

⁵⁹ Ibid 1.

⁶⁰ Ibid 322.

⁶¹ Garnaut Climate Change Review, Terms of Reference, (30 April 2007) <http://www.garnautreview.org.au/CA25734E0016A131/pages/all-reports--resources.html#Issues>.

⁶² Commonwealth of Australia, Garnaut Climate Change Review Final Report, (Cambridge University Press, 2008) 309Google Scholar ('The Garnaut Review’).

⁶³ Pigou, above n 54, inter alia at pt II.IX.16.

⁶⁴ William, J Baumol and Wallace, E Oates, ‘The Use of Standards and Prices for Protection of the Environment', (1971) 73(1) Swedish Journal of Economics 42, 42Google Scholar.

⁶⁵ Ibid.

⁶⁶ Ibid 46.

⁶⁷ Ibid 45.

⁶⁸ OECD, above n 56

⁶⁹ European Environment Agency, ‘Environmental Taxes: Implementation and Environmental Effectiveness’ (EEA Environmental Issue Report 1, 1996), 8 <http://www.eea.europa.eu/publications/92-9167-000-6>.

⁷⁰ European Environment Agency, ‘Market-based Instruments for Environmental Policy in Europe’ (EEA Technical Report 8/2005 (26 January 2006). <http://www.eea.europa.eu/publications/technical_report_2005_8>.

⁷¹ European Environment Agency, ‘Environmental Taxes': above n 69, 8.

⁷² M Pearson and S Smith, ‘The European Carbon Tax: An Assessment of the European Commission's Proposals’ (Report R39, Institute for Fiscal Studies, December 1991) 942.

⁷³ OECD, above n 56.

⁷⁴ Roberta, F Mann, ‘The Case for the Carbon Tax: How to Overcome Politics and Find Our Green Destiny’ (2009) 39 Environmental Law Reporter 10118, 10125Google Scholar.

⁷⁵ Steve, Hatfield Dodds, ‘Practical Issues in the Design of Environmental Taxes in Australia’ in Lawrence, A Kreiser (ed), Critical Issues in International Environmental Taxation (CCH, Chicago 2002) 3, 34Google Scholar.

⁷⁶ A background paper prepared by the Henry Tax Review, Architecture of the Australian Tax and Transfer System (Commonwealth of Australia, August 2009), 283, identified the charges imposed by the Aircraft Noise Levy Act 1995 (Cth), and Product Stewardship (Oil) Act 2000 (Cth) as two examples. One could also suggest the former Leaded Petrol Levy introduced in 1993 through amendment to the fuel excise rates set by the Excise Tariff Act 1921 (Cth).

⁷⁷ Eric, Engle, ‘Ecotaxes and the European Union’ (2007) 16 (11) European Energy & Environmental Law Review 298, 303Google Scholar. But one could equally argue the possible detrimental impact on competitiveness by emissions trading schemes.

⁷⁸ Clive Hamilton, Tor Hundloe and John Quiggin, ‘Ecological Tax Reform in Australia: Using Taxes, Charges and Public Spending to Protect the Environment without hurting the Economy’ (Discussion Paper No 10, The Australia Institute, April 1997), 42.

⁷⁹ Richard Denniss and David Richardson, ‘Why a Carbon Tax is Good for the Hip Pocket', (Policy Brief No 17, The Australia Institute, August 2010), 2.

⁸⁰ Ronald, Coase, ‘The Problem of Social Cost’ (1960) 3 Journal of Law and Economics 1Google Scholar.

⁸¹ Ibid 44.

⁸² William, J Baumol, ‘On Taxation and the Control of Externalities', (1972) 62(3) American Economic Review, 307–22Google Scholar.

⁸³ Coase, above n 80, 15.

⁸⁴ Ibid.

⁸⁵ Ibid.

⁸⁶ Baumol and Oates, above n 7, 180–90.

⁸⁷ Ibid.

⁸⁸ Ibid.

⁸⁹ European Environment Agency, ‘Market-based Instruments for Environmental Policy in Europe’ above n 70, 19.

⁹⁰ Ibid 17.

⁹¹ Ibid.

⁹² Ibid 21.

⁹³ Committee on Climate Change, Building a Low-carbon Economy – the UK's Contribution to Tackling Climate Change (1st Report of the Committee on Climate Change, 1 December 2008), 149.

⁹⁴ European Environment Agency, ‘Market-based Instruments for Environmental Policy in Europe’ above, n 70, 21.

⁹⁵ T H Tietenberg, ‘The tradable permits approach to protecting the commons: What have we learned?’ (paper presented at the CATEP workshop ‘Trading scales: Harmonising industry, national and international emission trading schemes', (Fondazione ENI Enrico Mattei, Venice, 3 and 4 December 2001), reproduced in European Environment Agency, ‘Market-based Instruments for Environmental Policy in Europe', above n 70, 21.

⁹⁶ European Environment Agency, ‘Market-based Instruments for Environmental Policy in Europe', above n 70, 21.

⁹⁷ Ibid 22.

⁹⁸ Ibid 21.

⁹⁹ Ibid 22.

¹⁰⁰ The 1990 Amendments to the US Clean Air Act 42 USC 7401–642 were implemented in Title IV (ss 401–16). The program was initially designed to reduce the adverse effects of ‘acidic compounds’ by requiring ‘affected sources’ to reduce annual emissions of sulfur dioxide in compliance with prescribed emission limitations by specified deadlines, through alternative methods of compliance provided by an emission allocation and transfer system (s 401).

¹⁰¹ Milieu Ltd, Danish Environmental Research Institute and the Center for Clean Air Policy ‘Case Study 1 Comparison of the EU and US Approaches Towards Acidification, Eutrophication and Ground Level Ozone’ in Assessment of the Effectiveness of European Air Quality Policies and Measures (A project for DG Environment, 4 Oct 2004), 20 <http://ec.europa.eu/environment/archives/cafe/activities/pdf/case_study1.pdf>.

¹⁰² Byron, Swift, ‘How Environmental Laws Work: An Analysis of the Utility Sector's Response to Regulation of Nitrogen Oxides and Sulfur Dioxide Under the Clean Air Act', (2001) 14 Tulane Environmental Law Journal 309, 315Google Scholar; A, Denny Ellerman and Juan-Pablo, Montero, ‘The Declining Trend in Sulfur Dioxide Emissions: Implications for Allowance Prices’ (1998) 36 Journal of Environmental Economics and Management 26, 29Google Scholar.

¹⁰³ Lesley, K McAllister, ‘The Overallocation Problem In Cap-And-Trade: Moving Toward Stringency’ (2009) 34 Columbia Journal of Environmental Law 395, 413Google Scholar.

¹⁰⁴ Chicago Climate Exchange (CCX) was established in 2003 as ‘a voluntary greenhouse gas reduction and offset trading platform… Founded by Richard L Sandor, the exchange sought to help businesses and markets prepare for potential regulations at the international, federal, and regional levels.’ The ‘[m]arket participants included major corporations, utilities and financial institutions with activities in all 50 United States, 8 Canadian provinces and 16 countries’ CCX Overview <http://www.chicagoclimatex.com/content.jsf?id=821>.

¹⁰⁵ CCX, CCX Advisory 2010-13 (21 Oct 2010) <http://www.chicagoclimatex.com/info/advisories/2010/2010-13.pdf>.

¹⁰⁶ Brad Norington, ‘Leader cools on climate agenda’ The Australian, 5 November 2010.

¹⁰⁷ Global Warming Solutions Act of 2006 (California, AB 32); see California Environmental Protection Agency Air Resources Board, Assembly Bill 32: Global Warming Solutions Act <http://www.arb.ca.gov/cc/ab32/ab32.htm>.

¹⁰⁸ ‘The Regional Greenhouse Gas Initiative (RGGI) is a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont', which have each adopted regulations based upon the schemes model rules; see Regional Greenhouse Gas Initiative, Program Design <http://www.rggi.org/design>.

¹⁰⁹ The European Union Greenhouse Gas Emissions Trading Scheme ('EU ETS’) is based on EU Directive 2003/87/EC, which entered into force on 25 October 2003; Official Journal L 275, 25/10/2003, 0032 – 0046 see: <http://eur-lex.europa.eu/Result.do?T1=V3&T2=2003&T3=87&RechType=RECH_naturel&Submit=Search>.

¹¹⁰ Independent Committee of Inquiry into Competition Policy in Australia, National Competition Policy Report (The Hilmer Report) (Australian, Government Printing Service, 1993) xv.

¹¹¹ Rowena Cantley-Smith, ‘Climate Change Law: A Changing Legal Environment For The National Electricity Market’ in Gumley and Winterbottom, above n 38, 26-7.

¹¹² Ibid 26-27.

¹¹³ Australian Government, Carbon Pollution Reduction Scheme: Australia's Low Pollution Future, (White Paper, 15 December 2008).

¹¹⁴ Carbon Pollution Reduction Scheme Bill 2010 (Cth) s 3.

¹¹⁵ Ibid s 5 (definitions).

¹¹⁶ Ibid.

¹¹⁷ Ibid.

¹¹⁸ Ibid. The greenhouse emissions covered are identical to those covered by the Kyoto Protocol (ie, carbon dioxide, methane, nitrous oxide, sulphur hexafluoride, hydrofluorocarbons and perfluorocarbons).

¹¹⁹ Ibid pt 3 divs (3)–(4).

¹²⁰ Ibid pt 3, div 2, subdiv B.

¹²¹ Ibid pt 3, div 3.

¹²² Ibid pt 4 div 2 subdiv C.

¹²³ Ibid pt 8.

¹²⁴ Customs Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2010 (Cth), would introduce a new s 19A into the Customs Tariff Act 1995 (Cth) and Excise Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2010 (Cth) would introduce a new s 6A into the Excise Tariff Act 1921 (Cth).

¹²⁵ Carbon Pollution Reduction Scheme Bill 2010 (Cth) pt 9.

¹²⁶ Australian Government, above n 113, 6-46 (Policy Position 6.21), 6-64 (Policy Position 6.28).

¹²⁷ Ibid, 6-62 (Policy Position 6.27).

¹²⁸ Prime Minister Kevin Rudd, Transcript of Doorstop Interview, Nepean Hospital, Penrith, NSW, 27th April 2010 (Interview Transcript 27th April 2010) <http://pmrudd.archive.dpmc.gov.au/node/6708>.

¹²⁹ Prime Minister of Australia, above n 1.

¹³⁰ Ibid.

¹³¹ Garnaut, above n 62, 317-8.

¹³² Ibid 304. Interestingly the Garnaut draft report was a little more specific: ‘The aim should also be to identify perverse incentives that might inadvertently inhibit investment in low-emissions technologies or promote activities associated with high emissions.’ (See Garnaut Climate Change Review, ‘Draft Report', (Draft Report, Garnaut Climate Change Review, June 2008), 356[14.3.4]).

¹³³ Henry Review Panel, above n 3, vii–viii (Terms of Reference).

¹³⁴ The publication of information on tax expenditures is required by the Charter of Budget Honesty Act 1998 (Cth). The latest statement was released on 29 January 2011: see The Treasury (Cth), ′Tax Expenditures Statement 2010′ (January 2011).

¹³⁵ Australian Government Department of Climate Change, ′National Greenhouse Gas Inventory; Accounting for the KYOTO Target′ (Report, Department of Climate Change, May 2009) 15 and 18 <http://www.climatechange.gov.au/climate-change/~/media/publications/greenhouse-report/national-greenhouse-gas-inventory-pdf.ashx>

¹³⁶ Income Tax Assessment Act 1997(Cth) div 392.

¹³⁷ Income Tax Assessment Act 1936 (Cth) ss 393.1–393.65.

¹³⁸ Income Tax Assessment Act 1997(Cth) ss 40–515–40–575.

¹³⁹ Ibid.

¹⁴⁰ Ibid.

¹⁴¹ Income Tax Assessment Act 1936(Cth) s 82KZMG.

¹⁴² Income Tax Assessment Act 1997(Cth) sub-div40(G).

¹⁴³ Ibid s 40–755.

¹⁴⁴ Ibid s 40-735.

¹⁴⁵ See A New Tax System (Goods and Services Tax) Act 1999 s 38–480.

¹⁴⁶ See Excise Act 1901 (Cth) s 78A.

¹⁴⁷ See, eg, Land Tax Act 1958 (Vic) s 9(1)(ga).

¹⁴⁸ See, eg, Duties Act 2000 (Vic) s 56.

¹⁴⁹ Australian Bureau of Statistics,, Australian Year Book 2005, (2005), 428.

¹⁵⁰ See Peter, Martin, Sarah, Crooks and Paul, Phillips, ‘Farm Financial Performance 2009–10’ (2009) 16(4) Australian Commodities 642Google Scholar.

¹⁵¹ CSIRO, Climate Change in Australia: Technical Report 2007 (CSIRO, 2007)Google Scholar, Executive Summary.

¹⁵² See comments on ‘habitual avoiders’ in Senate Economics References Committee, Parliament of Australia, Inquiry into Mass Marketed Tax Effective Schemes and Investor Protection (Final Report, 2002), 6-7.

¹⁵³ Centre for International Economics Capitalising on the Building Sector's Potential to Lessen the Costs of a Broad Based GHG Emission Cut (2007) 12, 13.

¹⁵⁴ See Government of Victoria Department of Planning and Community Development, Housing types and sizes, (16 September 2010, Melbourne Atlas 2006- Housing) <http://www.dpcd.vic.gov.au/__data/assets/pdf_file/0013/31054/Housing_types_and_sizes.pdf>.

¹⁵⁵ Garnaut, above n 62, ch 17.

¹⁵⁶ Income Tax Assessment Act 1997 (Cth) sub-div 118–B Main residence.

¹⁵⁷ Australian Government, The Treasury, above n 134, 7 (Table 1.3 Large measured tax expenditures in 2010–11) Items E4 and E5.

¹⁵⁸ Income Tax Assessment Act 1997 (Cth) pt 3-1 (Capital gains and losses).

¹⁵⁹ Australian Government, The Treasury, above n 134, 7 (Item E14).

¹⁶⁰ This revenue foregone by negative gearing is not separately quantified by Treasury as it is considered a ‘design feature’ of the tax system and thus outside the chosen definition of ‘tax expenditure’ Tim Colebatch, Economics Editor for The Age (Melbourne), recently estimated the forgone revenue at $5 billion: Tim Colebatch, ‘Negative Gearing Top Tax Break', The Age (Melbourne) 27 March 2010.

¹⁶¹ Income Tax Assessment Act 1997 (Cth) s 8–1. Under this provision there is generally no requirement for income derived from an investment asset to exceed the expenses allowed as a deduction.

¹⁶² Alex May, ‘How one man makes $8200 a day by living in Sydney's best street', Sydney Morning Herald (online), 6 April 2008 <http://www.smh.com.au/news/national/how-one-man-makes-8200-a-day-by-living-in-sydneys-best-street/2008/04/05/1207249535935.html>.

¹⁶³ National Centre for Economic and Social Modelling, referred to in Michelle Grattan, ‘Rudd Determined to Act on Housing Affordability’ The Age (Melbourne), 3 March 2008.

¹⁶⁴ Newman and Kenworthy have pointed out that the adverse social and environmental impacts of auto cities has been traded off erroneously by decision makers who saw economic benefits from increased mobility; Peter, Newman, and Jeffery, Kenworthy, Sustainability and Cities: Overcoming Automobile Dependence (Island Press, 1999), 52Google Scholar.

¹⁶⁵ See Australian Government, above n 113. Under the Federal Renewable Energy Target program, Solar Credits are provided in the form of additional tradeable Renewable Energy Certificates or ‘RECs’ for eligible small-scale solar PV, wind and hydro electricity systems installed or after 9 June 2009. Further incentives are provided by ‘feed-tariffs’ provided by State based electricity suppliers; see Alan Dooley, ‘Solar electricity incentives’ Choice Online (3 August 2009) <http://www.choice.com.au/Reviews-and-Tests/Household/Energy-and-water/Solar>.

¹⁶⁶ Henry Review Panel, above n 3, 70, (Recommendation 14).

¹⁶⁷ Prime Minister Kevin Rudd and Treasurer Wayne Swan, , ‘Stronger Fairer Simpler: A Tax Plan for Our Future’ Commonwealth Treasurer (Media Release No 028, 2 May 2010).

¹⁶⁸ Henry Review Panel, above n 3, 422 (Recommendation 69).

¹⁶⁹ Ibid 428 (Recommendations 70).

¹⁷⁰ Department of Climate Change and Energy Efficiency, above n 135, 8.

¹⁷¹ Garnaut, above n 62, 525, 526.

¹⁷² See Commonwealth of Australia, 2010, ‘Budget Paper No 1: Budget Strategy and Outlook 2010-11', (Budget Paper, No 1, 11 May 2010) 5-25 (Statement 5: Revenue, Table 10). Aviation fuels are subject to a lower excise rate of 28.54 per cent. The Budget papers refer only to fuel excise. There is no specific inclusion of fuel within GST – GST applies to any ‘supply’ of all goods and services unless exempted – see: A New Tax System (Goods and Services Tax) Act 1999 (Cth) s 9-1. This sections simply states: ‘GST is payable on taxable supplies'.

¹⁷³ Ibid 5-24 (Table 9).

¹⁷⁴ Henry Review Panel, above n 76, 212 ('Chart 5.12: Taxes as Percentage of Unleaded Petrol Price in 28 OECD Countries'.)

¹⁷⁵ Commissioner of Taxation, Australian Taxation Office, 2009-2010 Annual Report, (ATO, Canberra 2010), 42 (Table 3.3.3).

¹⁷⁶ Peter Costello, ‘Tax Reform, Not a New Tax, A New Tax System; Overview’ (August 1998), 21.

¹⁷⁷ Henry Review Panel, above n 3, 377 (Section E3-3: Road Pricing Should Reflect Social Costs) and Recommendation 65.

¹⁷⁸ Ibid 398 (The Future of Fuel Tax).

¹⁷⁹ The Fringe Benefits Tax Assessment Act 1986 (Cth) provides that fringe benefits tax (FBT) applies to employers who provide non-cash benefits to staff in lieu of salary or wages. The system requires payment of FBT by the employer on the taxable value of the benefit, at the flat rate of 46.5 per cent, whilst making the benefit value exempt from income tax for the employee. The taxable value of a car benefit is determined by a formula which applies a prescribed percentage to the base value of the car. The prescribed percentage varies according to the annual number of kilometres travelled by the vehicle. The environmental anomaly is that the percentage starts at 26 per cent for vehicles which travel less than 15 000 kilometres per annum and then it progressively reduces to as little as 7 per cent for vehicles travelling over 40 000 km.

¹⁸⁰ The Australian Taxation Office reported that 34 820 car benefits were provided in for the 2007–08 FBT year; see Australian Taxation Office, Taxation Statistics 2006-2007 <http://www.ato.gov.au/content/downloads/00177078_2007FBT3.pdf>, 2 Table 3.

¹⁸¹ The Australian Treasury, above n 134, 7, 139 (Item D18).

¹⁸² Fringe Benefits Tax Assessment Act 1986 (Cth) s 53.

¹⁸³ The Australian Treasury, above n 134, 7, 140 (Item D20), 145 (Item D33), 148 (Item D41).

¹⁸⁴ Commonwealth of Australia, Review of Australia's Automotive Industry: Final report (Commonwealth of Australia, 2008)Google Scholar, ('the Bracks Review’), 72.

¹⁸⁵ Garnaut, above n 61, 527. For a comprehensive analysis of the car benefit regime and recommendations for reform, see Celeste, Black, ‘Fringe Benefits Tax and the Company Car: Aligning the Tax with Environmental Policy’ (2008) 25 Environmental and Planning Law Journal 182Google Scholar.

¹⁸⁶ See, eg, Transport for London, Congestion Charging <http://www.tfl.gov.uk/roadusers/congestioncharging/default.aspx>.

¹⁸⁷ See, eg, Office of the Premier of Victoria, ‘City Car Parking Levy To Ease Congestion’ (Victoria Media Release, Friday, April 22, 2005 ).

¹⁸⁸ The main mechanism for concessional treatment of employer provided cars is the formula for calculating the taxable value of a car under Fringe Benefits Tax Assessment Act 1986 (Cth) s 9. This formula treats imported cars exactly the same as locally produced cars for FBT purposes.

¹⁸⁹ Henry Review Panel, above n 3, 47 (Part 2, Volume 1, Recommendation 9(b)).

¹⁹⁰ Ibid viii.

¹⁹¹ Neil Brooks, ‘The Importance of the Tax Expenditure Concept to Australia's Future Tax System Review Panel', Notes for a Presentation to Business Tax Reform Colloquium at Sydney, 23–25 February, 2009.

¹⁹² Ibid 3.

¹⁹³ The Treasury (Cth), above n 134, 3, 4 (Table 1.1)

¹⁹⁴ Brooks, above n 191, 22-3 [3.3].

¹⁹⁵ Henry Review Panel, above n 3, 105 (Recommendation 135).

¹⁹⁶ Ibid 106 (Recommendation 136).

¹⁹⁷ Ibid (Recommendation 137), see also, 105 (Recommendation 132).

¹⁹⁸ Ibid 106 (Recommendation 138).

¹⁹⁹ Garnaut, above n 62, xviii (Introduction).

²⁰⁰ Roberta F Mann, above, n 74, 10 122.

²⁰¹ Ibid 10 120.

²⁰² Ibid.

²⁰³ Ibid.

²⁰⁴ Ibid 10 122.

²⁰⁵ Celeste Black, ‘Climate Change and Tax Law: Tax Policy and Emissions Trading’ (Research Paper No 09/09, Sydney Law School, March 2009).

²⁰⁶ Australian Government, above n 135, 24-25 (Appendix 3 Emission trends, Table 1).

²⁰⁷ Prest, above n 38, 204–05.