Energy and transport subsidies in Australia

The environmental impact of transport in Australia is considerable. Australia subsidizes fossil fuel energy, keeping prices artificially low and raising greenhouse gas emissions due to the increased use of fossil fuels as a result of the subsidies. The Australian Energy Regulator and state agencies such as the New South Wales' Independent Pricing and Regulatory Tribunal set and regulate electricity prices, thereby lowering production and consumer cost.

According to a report by The Institute for Sustainable Futures (ISF) [7] at University of Technology Sydney, titled: "Energy and Transport Subsidies in Australia", roughly 70% of the country's greenhouse gas emissions are caused by the energy and transport industries. The uptake of renewable energy in these sectors is slow because of subsidies to fossil fuels and the high cost of acquiring the sophisticated technology required to produce cleaner fuels. Furthermore, fossil fuels are easier to transport and use, compared to renewable energy, which often require sophisticated instruments to acquire and store. The report revealed that for the 2005–2006 financial year, transport subsidies were measured to reach up to $10.1 billion, of which 74% related to transport, 18% to electricity and 4% to renewable and efficient energy. These subsidies help energy generation companies increase their profits, therefore encouraging the building of additional coal-fuel power plants. Investing in other, more sustainable, types of electricity generation plants would have cost less than continuing to subsidize the building of these power plants. On a positive note, alternative transport fuels such as natural gas and liquefied petroleum gas are excused from fuel excise/tax.

Tax calculated for the use of a company car is calculated as such: the further the person drives the car, the higher the business use and the lower the personal use. Since tax is calculated based on personal use, drivers tend to drive longer distances to lessen the amount of tax that they have to pay. This leads to a higher consumption of vehicular fossil fuels and, subsequently, higher greenhouse gas emissions.

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