Chris Bowen and David Littleproud reject ‘carbon solutions levy’ proposed by Rod Sims and Ross Garnaut

The Greens was the only political party to back a carbon tax proposal by former regulator Rod Sims and economist Ross Garnaut, which business said sent shivers up spines.

Rod Sims addresses the National Press Club on 'Realising Australia's economic and climate opportunities' in Canberra on Wednesday. Picture: NCA NewsWire / Martin Ollman

Labor and the Coalition have rebuffed a call to embrace a “carbon solutions levy” on fossil fuel companies and imports, in a rare bipartisan move on climate action that all but kills off a carbon tax.

Industry and business leaders also blasted the proposal from former ACCC chair Rod Sims and economist Ross Garnaut to impose a $90 per tonne carbon tax on 105 coal, gas and oil companies that extract fossil fuel in Australia and on all fossil fuel imports, in a bid to supercharge green exports and reduce global emissions. 

The Greens was the only political party to hail the plan, which was unveiled at the National Press Club on Wednesday and would be operational by 2030-31, raising $100bn in its first year.

Climate Change and Energy Minister Chris Bowen’s spokeswoman told The Australian: “The Albanese government is not considering and will not implement anything like a carbon solutions levy.”

Government sources said the abundance of clean, cheap renewables was Australia’s best comparative advantage and underpinned Labor’s plan for the country to become a renewable energy superpower.

Nationals leader David Littleproud said the carbon tax proposal was flawed because Australia was not the only place in the world resources could be extracted from.

“This would destroy resources’ jobs and our economy,” he said.

“This proposal also conveniently places all the burden on regional Australia, but all Australians will pay, by tearing up agricultural land with renewable projects that will drive up food prices.”

Mr Sims said under the Superpower Institute’s plan, an organisation which he chairs and Professor Garnaut is deputy chair, the development of green energy industry would be well away from farmland and would mostly occur up north, describing it as a “boon” for the regions.

“If people don’t want it in their backyard, there’s plenty of plenty of room left in everybody else’s backyard,” he said.

“I’m very confident that at some stage this (a carbon solutions levy) will get adopted. I just can’t tell you when.”

Mr Sims was unable to say who was funding the organisation, which has charity status, explaining they’d asked for their contributions to remain anonymous.

Climate 200 founder Simon Holmes a Court is a director and was at the press club address in Canberra.

“I’m afraid we cannot mention who the sponsors are but they are philanthropic organisations that are interested in the thesis we’re putting forward about the opportunity for Australia and the climate,” Mr Sims said.

Business leaders, miners, oil and gas companies declared the climate wars were over and pointed to the government’s safeguard mechanism – which requires Australia’s 215 largest polluters to cut their annual emissions by about 5 per cent every year – as a policy to drive down emissions.

“Reducing global emissions will require innovation and creativity, simplistic and blunt taxes on Australian industry is not the way forward,” Minerals Council of Australia chief executive Tania Constable said.

“The challenge Australia must be focused on is how we get there without damaging our economy and slashing tens of thousands of regional jobs and billions in investment.”

Australian Energy Producers chief executive Samantha McCulloch added: “The last thing the Australian economy needs is more interventions, taxes and shifting goalposts that will only add to cost of living pressures for the millions of households and business that rely on gas.”

Australian Industry Group chief executive Innes Willox said the mere mention of anything resembling the term “carbon tax” being reintroduced into the political debate “sends shivers up spines right across the economy”.

“Taxing one sector to promote another is inherently problematic,” he said.

Australian Chamber of Commerce and Industry chief executive Andrew McKellar said there were still significant questions about the technical feasibility of the hydrogen pathway Mr Sims and Professor Garnaut were proposing, with hydrogen storage and transport a key component of the renewable energy superpower plan.

“There’s hundreds of billions in potential investment in major resource and energy projects at the moment, which is being endangered by a clunky environmental approvals process,” Mr McKellar said.

“That’s an urgent priority that would go a long way to helping address that transitional gap that we have in energy over the coming decades.”

Business Council of Australia chief executive Bran Black said the safeguard mechanism, the Climate Change Authority’s sectoral emissions reduction pathways and the broader process for setting 2035 targets should be allowed to run their course.