Department of Climate Change and Energy Efficiency : Australia's clean energy future

The Gillard Government has achieved a major milestone in its plan for Australia's clean energy future with today being the first day major greenhouse gas emitters will be required to pay for their pollution.

The carbon price which starts today means that in the year 2020, Australia's carbon pollution will be at least 159 million tonnes less per annum than it would be without this policy -the equivalent of taking 45 million cars off the road.

To help families with the costs that some businesses will pass on to them, a new round of tax cuts are also starting today, including trebling the tax-free threshold from $6000 to $18,200.

Today we take the next steps the country needs to make to keep our economy competitive, to protect our environment and to provide a cleaner Australia for future generations.

The scientific advice is that the planet is warming and it is imperative that we cut greenhouse gas emissions. The economic advice is that a carbon price is the cheapest and most efficient way to reduce carbon pollution.

A carbon price will create incentives for large emitters to reduce carbon pollution.

It will start transforming our economy to clean energy sources like solar, wind, geothermal and natural gas.

More than half the revenue raised will help households with the modest cost of living impacts through tax cuts, higher family payments and increases in pensions and other benefits and allowances.

Lump sum household assistance payments have already been paid and these will be followed by increases in regular payments of family payments, pensions, and other Government allowances and benefits from next year.

Tax cuts will start flowing into the pay packets of working Australians from today.

In addition to helping people with the cost of living, the Government is reforming the tax system by trebling the tax-free threshold from $6000 to $18,200 in 2012-13.

The Government is also supporting jobs and competitiveness in industries with high emissions and strong international competition.

The most emissions-intensive and trade-exposed industry activities are shielded from 94.5 per cent of the carbon price - meaning their effective carbon price is less than $1.30 a tonne.

This will preserve international competitiveness while maintaining incentives to invest in cleaner technologies.

A carbon price is a responsible economic reform.

Treasury modelling shows the economy will continue to grow with a carbon price in place - 1.6 million new jobs will be created to 2020 and new industries in clean technology and renewable energy will be created.

Today also marks the commencement of the Climate Change Authority and the Australian Renewable Energy Agency.

The Climate Change Authority will make recommendations on pollution caps to apply when the carbon price moves to a flexible priced emissions trading scheme in 2015.

The Australian Renewable Energy Agency (ARENA) will provide grants and financial assistance for projects with a focus on renewable energy and energy efficiency technologies to make them more cost competitive.

ARENA will administer $3.2 billion in existing Government support for research and development, demonstration and commercialisation of renewable energy technologies.

Further information about the Gillard Government's Clean Energy Future plan is available at www.cleanenergyfuture.gov.au

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