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Transport’s inclusion in carbon tax a must: Nye

ARA CEO writes to PM and transport ministers telling them a carbon tax must include fuel when it is introduced

By Brad Gardner | June 6, 2011

The Australasian Railway Association (ARA) has written to Prime Minister Julia Gillard and the nation’s transport ministers telling them a carbon tax must apply to fuel.

As the deadline on the announcement of a carbon price draws closer, ARA CEO Bryan Nye says the significant contribution the transport sector makes to carbon emissions means it must be included in any mitigation scheme.

In his letter, Nye says there should be no exemption for liquid fuels and that any revenue raised from taxing transport should be funnelled into transport infrastructure projects that reduce emissions.

“Rail’s emissions intensity, as compared to road transport, is up to three times lower for passenger services, four times lower for containerised freight movements, and potentially ten times lower for bulk freight movements,” he writes.

Nye says more must be invested into the rail network if Australia is serious about reducing its carbon footprint.

“Our continued over-reliance on road transport and the congestion it is causing is neither economically viable nor environmentally sustainable,” he writes.

“Exemption of liquid fuels for road vehicles will only encourage the use of more emissions intensive modes of transport and necessitate investment in costly infrastructure that could be better used in areas that improve our quality of life.”

The Federal Government’s climate change advisor, Professor Ross Garnaut, supports transport’s inclusion under a carbon tax and an emissions trading scheme.

Calling for a carbon price of between $20 and $30 a tonne that rises by 4 percent each year, Garnaut recommends a one-off cut to the fuel excise for trucking operators for one year.

The measure would be permanent for households under Garnaut’s plan, which was announced last week.

He also supports using 55 percent of the revenue raised from a carbon tax on household assistance in the form of reducing income tax rates.

Garnaut wants 35 percent spent on compensating energy intensive and trade-exposed businesses, with the remaining revenue to be used on research and development.

The Federal Government is expected to announce a starting price for the carbon tax in July. Gillard plans to introduce it in 2012.

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