By Jane Garcia in Darwin

Local government has an important role to play in delivering and facilitating innovative approaches to abating greenhouse gas emmissions. And councils should be acting now to secure some of the revenue from a potential carbon trading system or carbon taxation to facilitate these responses to climate change, according to this year’s State of the Regions report, launched on Monday at the National General Assembly of Local Government held in Darwin.

The report has emphasised the potential effects of climate change on the economic development of Australia’s regions and the need for Australian governments to act to cut greenhouse gas emissions.

"Whether it is an inconvenient truth or just inconvenient for greenhouse policy, particularly in Australia and the United States, the two non-Kyoto ratifiers, there has been a major shift ion public and policy attitudes towards the need to seriously and immediately implement effective greenhouse gas abatement (GHGA) measures," says the report.
"Future greenhouse associated policies in Australia remain uncertain but will undoubtedly include an emission trading scheme covering at least some industry sectors."

According to the report, there are two main ways government can reduce emissions by making them more expensive: a carbon tax on fuels graded according to their carbon content or quotas on the carbon content of fuel consumption (otherwise known as emissions rationing). In the second system, the government sets the quota for carbon emissions and the market sets the price and how much is used.

Prior to the recent federal election, both parties committed to a national tradable emission permit system being developed in Australia in the next five years.

According to the State of the Regions report, a cost of about $35 per tonne of carbon will probably be the minimum required to stimulate the abatement responses needed to reduce the rate of CO2 in the atmosphere.

Both schemes can be described as a form of ‘carbon tax’ because both will impact household incomes as "it is going to go directly on electricity consumed, the petrol you buy for your car and the gas you use to heat your homes," National Economics’ Ian Manning told delegates at the General Assembly.

"The reality is that about 55 per cent of carbon emissions by households comes from goods and services you buy and 45 per cent from direct energy," he said.
"[The tax] will be directly proportional to the carbon content and, in fact, it percolates around the economy.

National Economics’  Peter Brain says the impact of a carbon tax on households could be 1.4 per cent of income in metropolitan areas, increasing to 2.2 per cent of income for lifestyle regions and 1.9 per cent of income for rural regions.

Professor Manning says carbon tax is not meant to solely be a revenue raising exercise for government but a "price changing device to increase the prices of climate-intensive technologies and services in order to discourage people from using them".
It is important that the revenue that is raised is leveraged to further reduce greenhouse gas emissions, he says.

The reports authors have urged local government to be proactive in seeking its share of fundings from any such schemes in order to provide grassroots emission abatement and mitigation schemes. Innovative local schemes can also provide wider economic development benefits by creating new environment-friendly technology and capacity that can be exported, creating more livable regions and providing direct local energy and water savings.

"Local government is an important potential emissions abatement investor and therefore has quite a strong claim on at least part of the revenue of a trading system or carbon tax,"  Ian Manning says.
"You should be getting your act together."

In putting together the State of the Regions report, National Economics has included some examples of local government actions cutting greenhouse gas emissions and offered the case study of Mount Alexander Shire in Victoria which has coordinated and implemented practical measures to reduce greenhosue gas emissions in its community by 30 per cent of 2000 levels by 2010.