How It Works

Australian Climate Dividend (ACD) is a carbon pricing plan, designed under a proven carbon fee and dividend model.

It will fairly and effectively accelerate emissions reductions, implementation of clean energy technologies, as well as stimulate economic growth.

Every Australian household receives a financial dividend and enables them a substantial role in decarbonising the economy.

Their spending of the dividend drives a steady transition towards zero emissions, boosts the economy, and creates many new jobs in new industries. This, in turn, generates non-financial benefits (dividends), to society as a whole.

The biggest dividend of all is a liveable world.

Economists and scientists widely consider the Australian Climate Dividend to be the most effective foundational and market-based solution for:

• Lowering emissions

• Encouraging investment in natural and technological solutions

• Simulating jobs growth and the economy

How do we know it will work?

Professors Holden and Dixon of UNSW modelled climate dividends in the Australian economy and published their results as the Australian Climate Dividend Plan.

They modelled a price that would meet our current Paris Agreement target, to reduce emissions by 26-28% which is well short of the reduction needed to reach net zero by 2050.

• However, they found that a fee levied on carbon at $50/ton would achieve this low target and provide a dividend of $1,310 per taxpayer, $2,620 for the average household.

• They estimated that household costs would rise about $2,035 leaving the average household $585 better off. Some households, including most with low incomes use less carbon and would therefore retain more than $585 of their dividend.

A 2014 US study by Regional Economic Models, Inc, the REMI Report examined the impact of a steadily-rising fee on carbon with revenue returned to households.

• Among other findings, the study shows that, after 20 years, a fee on carbon dioxide rising $10 per ton each year would reduce greenhouse gas emissions 52 percent while adding 2.8 million jobs to the economy.

What other countries have climate dividends?

Climate Dividends were introduced in Canada in 2018 and have already survived an election in which climate and carbon pricing were high on the agenda. The Greenhouse Gas Pollution Pricing Act 2018 provides a climate dividend to three Canadian provinces and territories and levies a fee on fossil fuels to support it.

British Columbia introduced a carbon fee in 2008 which does not pay a dividend but does recycle 100% of the revenue through tax cuts and concessions to low-income families. Emissions have reduced significantly and the economy has out-performed all other Canadian Provinces.

A climate dividend bill, the Energy Innovation and Carbon Dividend Act is currently before the United States Congress. It has bipartisan support and many co-sponsors. Under the Biden administration’s climate agenda it has a good chance of being debated soon. If passed it will provide carbon dividends and rapidly decarbonise the US economy.

Australia’s own carbon price, the Clean Energy Act 2011 recycled much of the revenue, some of it to households, but not in a way that enabled citizens to easily see how they were benefiting. Emissions reduced significantly while it was in place and rose when it was repealed. The economy grew at 2.6%/year while it was in place.