Clean Energy Act 2011

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Clean Energy Act 2011
Coat of Arms of Australia.svg
Parliament of Australia
  • A Bill for an Act to encourage the use of clean energy, and for other purposes
CitationClean Energy Act 2011 (Cth)
Enacted byAustralian House of Representatives
Passed12 October 2011
Enacted byAustralian Senate
Passed8 November 2011
Royal assent18 November 2011
Commenced1 July 2012
Legislative history
First chamber: Australian House of Representatives
Bill titleClean Energy Bill 2011
Introduced byJulia Gillard
First reading13 September 2011
Second reading11 October 2011
Third reading12 October 2011
Second chamber: Australian Senate
Bill titleClean Energy Act 2011
Introduced byJoe Ludwig
First reading12 October 2011
Second reading12 October 2011
Third reading8 November 2011
Clean Energy Legislation (Carbon Tax Repeal) Act 2013 (Cth)
Status: Repealed

The Clean Energy Act 2011 was an Act of the Australian Parliament, the main Act in a package of legislation that established an Australian emissions trading scheme (ETS), to be preceded by a three-year period of fixed carbon pricing in Australia designed to reduce carbon dioxide emissions[1] as part of efforts to combat global warming.[2]

The package was introduced by the Gillard Labor Government in February 2011 and was repealed by the Abbott Government on 17 July 2014, backdated to 1 July 2014.


Rudd Government[edit]

The Gillard Labor Government's legislation followed unsuccessful efforts by the Rudd Labor Government to secure passage of an ETS through the Australian Parliament. In opposition, Rudd had called climate change "the greatest moral, economic and social challenge of our time" and called for a cut to greenhouse gas emissions by 60% before 2050.[3] Both the incumbent Howard Government and the Rudd Labor opposition promised to implement an ETS before the 2007 federal election. Labor won the election, and the Rudd government began negotiating the passage of an ETS through Parliament.

The Opposition led by Brendan Nelson called for the vote on the government's ETS be delayed until after the United Nations climate change summit in Copenhagen in December 2009.[4] Rudd said in response that it would be "an act of absolute political cowardice, an absolute failure of leadership not to act on climate change until other nations had done so" and the government pursued the early introduction of the Scheme.[5]

Choosing not to negotiate with the Australian Greens, who did not hold the balance of power in the Senate,[6] the government entered negotiations with the new Liberal Opposition Leader, Malcolm Turnbull, and in the lead up to the Copenhagen Conference, developed an amended Carbon Pollution Reduction Scheme (CPRS), with the support of Turnbull. Following a party revolt by Coalition members opposed to the Scheme, and shortly before the carbon vote, Tony Abbott challenged for the leadership of the Liberal Party and narrowly defeated Turnbull. Thereafter the Coalition opposed the ETS outright and the government was unable to secure the support of any other senators for its CPRS.

Abbott described Rudd's Emission Trading plan as a "Great big tax on everything" and opposed it. Abbott announced a new Coalition policy on carbon emission reduction in February, which committed the Coalition to a 5% reduction in emissions by 2020. Abbott proposed the creation of an 'emissions reduction fund' to provide 'direct' incentives to industry and farmers to reduce carbon emissions.[7]

Following the unsuccessful Copenhagen Conference, Rudd announced the deferral of the Scheme and elected not to take the matter to a double dissolution election.[8] In June 2010, Rudd was replaced as leader of the Labor Party in an internal party leadership challenge and Julia Gillard became Prime Minister. Factional leader and key Gillard supporter Bill Shorten said that the sudden announcement of change of policy on the CPRS was a factor that had contributed to a collapse in support for Rudd's leadership.[9]

Gillard Government[edit]

Following her election as party leader, in various policy announcements in the lead up to the 2010 election, Prime Minister Gillard and Treasurer Wayne Swan gave assurances that no carbon tax would be introduced by a Gillard led government, but that a "citizens' assembly" would be called to sound out public support for a price on carbon.[10][11]

The 2010 election resulted in a hung parliament in which Gillard secured the support of the Greens and three independents to form a government. On 28 September, in a joint press conference with the Greens, Gillard announced that a citizens assembly would not be held and that instead a "multi-party climate change committee" consisting of Labor, Greens and Independent members, would examine the issues.[12]

On 24 February 2011, in a joint press conference of the "Climate Change Committee" – comprising the Government, Greens and two independent MPs – Gillard announced a plan to legislate for the introduction of a fixed price to be imposed on "carbon pollution" from 1 July 2012[13] The carbon price would be placed for three to five years before a full emissions trading scheme is implemented, under a blueprint agreed by a multi-party parliamentary committee.[14] Key issues remained to be negotiated between the Government and the cross-benches, including compensation arrangements for households and businesses, the carbon price level, the emissions reduction target and whether or not to include fuel in the tax.[15]

The Gillard Government proposed the Clean Energy Bill in February 2011,[16] which the opposition claimed was a broken election promise.[17] The legislation was approved by the House of Representatives in October 2011[18] and by the Senate in November 2011.[19] The Liberal Party vowed to overturn the legislation if elected.[20]


The Act begins on 1 July 2012, and operates on a financial year basis. It is administered by the Clean Energy Regulator and the responsible Minister. A carbon pollution cap limits the sum of: (a) the total number of auctioned carbon units; and (b) the total number of free carbon units issued in accordance with the Jobs and Competitiveness Program; and (c) the total number of free carbon units issued to coal-fired electricity generators. If a person (including a corporation) is responsible for covered emissions of greenhouse gas from the operation of a facility, the facility's annual emissions are above a threshold, and the person does not surrender one eligible emissions unit for each tonne of carbon dioxide equivalence of the gas, the person is liable to pay unit shortfall charge. The financial years beginning on 1 July 2012, 1 July 2013 and 1 July 2014 are fixed charge years (otherwise known in popular terms as the 'carbon tax'). In a fixed charge year, carbon units will be issued under the Act for a fixed charge. Later financial years are flexible charge years which involve emissions trading. In a flexible charge year, carbon units will be issued under the Act as the result of an auction plus by means of free allocation to coal fired generators and emissions-intensive trade-exposed (EITE) industries. However, in the flexible charge years beginning on 1 July 2015, 1 July 2016 and 1 July 2017, some carbon units may be issued for a fixed charge (to act as a cap). Furthermore, free carbon units will be issued under the Jobs and Competitiveness Program (which deals with emissions-intensive trade-exposed (EITE) activities). Free carbon units will be issued to coal-fired electricity generators. If a carbon unit was not issued for a fixed charge, the unit is transferable. The Climate Change Authority will conduct periodic reviews of the Act.


Under the scheme, around 500 entities will be required to buy permits for each tonne of CO2 emitted. Personal income tax will be reduced for those who earn less than $80,000 per year and the tax-free threshold increased from $6,000 to $18,200.[21] In February 2012, the Sydney Morning Herald reported that Clean Energy Future carbon price had not deterred new investment in the coal industry, as spending on exploration had increased by 62 percent in 2010–2011, more than any other mineral commodity. The government agency Geoscience Australia reported that investment in coal prospecting reached $520 million in 2010–2011.[22]

See also[edit]


  1. ^ "National Greenhouse and Energy Reporting Regulations 2008 – F2013C00778".
  2. ^ "Clean Energy Bill 2011". Department of Climate Change and Energy Efficiency. Australian Government. 2 September 2011. Retrieved 19 October 2011.
  3. ^ Peter Van Onselen (27 December 2008). "Rule of reckless vows". The Australian. Retrieved 16 December 2013.
  4. ^ "Coalition to amend ETS 'to aid business'". The Sydney Morning Herald. 15 September 2009.
  5. ^ "The 7.30 Report". ABC. 28 April 2010. Retrieved 25 April 2012.
  6. ^ "Rudd favours Turnbull over Greens on ETS". 10 October 2009.
  7. ^ Mclennan, David (2 February 2010). "Abbott announces emissions plan – Local News – News – General". The Canberra Times. Archived from the original on 6 February 2010. Retrieved 5 June 2010.
  8. ^ Gillham, Alexis (27 April 2010). "Kevin Rudd delays plans for emissions trading scheme until 2013". Herald Sun. Retrieved 5 June 2010.
  9. ^ "The Gillard Coup | Q&A | ABC TV". Australian Broadcasting Corporation. 28 June 2010. Retrieved 12 July 2010.
  10. ^ "PM says no carbon tax under her govt". Archived from the original on 2 May 2012. Retrieved 25 April 2012.
  11. ^ Emma Rodgers (23 July 2010). "Gillard heckled at climate policy launch – ABC News (Australian Broadcasting Corporation)". Australia: ABC. Retrieved 25 April 2012.
  12. ^ "Gillard names climate change committee – carbon tax possible". The Age. Melbourne, Australia. 28 September 2010.
  13. ^ Packham, Ben; Massola, James (24 February 2011). "Australia to have carbon price from July 1, 2012, Julia Gillard announces". The Australian.
  14. ^ (24 February 2011). Carbon price to begin from July 2012: Midday roundup Archived 16 April 2012 at the Wayback Machine. Retrieved 13 May 2012.
  15. ^ Maher, Sid (25 February 2011). "PM ready for fight on carbon tax as Abbott vows 'people's revolt'". The Australian.
  16. ^ Leslie, Tim (24 February 2011). "Gillard unveils Carbon Price Details". ABC News.
  17. ^ Hudson, Phillip (26 February 2011). "Tony Abbott calls for election on carbon tax". Herald Sun. Retrieved 5 May 2011.
  18. ^ Johnston, Matt (12 October 2011). "Carbon tax bills pass lower house of federal Parliament". Herald Sun. Retrieved 12 October 2011.
  19. ^ AAP with Reuters (8 November 2011). "Carbon tax gets green light in Senate". The Sydney Morning Herald. Retrieved 9 November 2011.
  20. ^ "Opposition vows to repeal carbon tax". The Sydney Morning Herald. 2 October 2011.
  21. ^ Julia Gillard, Prime Minister (12 October 2011). Parliamentary Debates (Hansard). Commonwealth of Australia: House of Representatives. p. 11607.
  22. ^ Peter Ker; Adam Morton (20 February 2012). "Carbon tax fails to slow coal boom". The Sydney Morning Herald. Retrieved 28 February 2012.

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