Taxes to influence energy use in road transportation in Australia

Prafula Pearce,David Goodfield

doi:10.1051/rees/2017036

Abstract

The desire to achieve a shift towards renewable energy will be difficult to achieve without a change in the energy use in road transportation in Australia. The transport sector in Australia is heavily reliant on oil and is responsible for contributing 18.1%, of Australia's annual greenhouse gas emissions. This paper examines the current Australian tax policy and its inability to make an impact on transport choices that would reduce energy use and emissions and promote alternative energy use. Some of the current taxes such as the luxury car tax can be singled out as a tax that has passed its “use-by” date. The paper explores how the Australian Government can use targeted taxation measures in order to encourage the purchase of low energy consumption and low-emission vehicles, reduce the number of registered cars on Australian roads and control the use of cars as a means of personal transportation. A comprehensive tax measure suggested in this paper is the luxury energy tax based on the premise that energy use in transportation is a luxury and should be taxed appropriately in order to curb its use and bring about a behaviour change in the choice and usage of motor vehicles.

Highlights

The transport sector in Australia is heavily reliant on oil which is a non-renewable resource with limited supply, but is responsible for 18.1% of Australia’s greenhouse gas (GHG) emissions
It is time to change as the Australian government reports indicate that Australia’s oil resources are in decline as crude oil resources are being depleted at a faster rate than they are being replenished by discovery, and as a result, Australia is increasingly relying on imported oil
The research discussed in this paper offers the potential for deconstructing prior knowledge in three areas, these being the status of oil reserves as this is the energy source used mainly for transportation; the characteristics of motor vehicles that impact upon the consumption of energy; and the tax and regulatory measures which may be adopted by Australia to influence the choice of passenger motor vehicles

Summary

Introduction

The transport sector in Australia is heavily reliant on oil which is a non-renewable resource with limited supply, but is responsible for 18.1% of Australia’s greenhouse gas (GHG) emissions. The reliance on motor vehicles for passenger transportation has been made possible due to the cheap availability of oil. It is time to change as the Australian government reports indicate that Australia’s oil resources are in decline as crude oil resources are being depleted at a faster rate than they are being replenished by discovery, and as a result, Australia is increasingly relying on imported oil. Since passenger vehicles in Australia consume the most oil, that is the focus of investigation of this research. Adapting behaviour in order to reduce the demand for oil, and implement alternative energy sources in passenger motor vehicles takes time. If we examine American history and the abolition of the slave trade, the southern

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