An Australian Road Transport Carbon Price: A Comparative Analysis

Australian Taxation Research Foundation, Research Study 50

Posted: 9 Oct 2017

Date Written: July 1, 2017


Road transport is vital to Australia’s economy in terms of moving people and goods. Despite this, road transport activities pose a substantial challenge for Australia in terms of climate change: making a sizeable and growing contribution to Australia’s annual greenhouse gas emissions. However, the decisions that Australians currently make about purchasing, owning, and using vehicles are the same that provide opportunities to mitigate greenhouse gas emissions in this sector.

This text explores the legal aspects of implementing a carbon price in Australia’s road transport sector at the time of vehicle purchase, use, and throughout ownership to encourage mitigation of greenhouse gas emissions. While laws could impose one of numerous instruments to establish a carbon price, there are strong grounds to utilise existing tax laws for this purpose given both the existing regulatory framework, and heavily taxed nature, of Australia’s road transport sector. Based on a functional comparison between Australian and German tax laws that affect road transport activities, this text recommends how existing Australian tax laws can be reformed to accommodate climate change objectives, taking account of not only environmental, but industry and revenue priorities. Germany is chosen for comparison based on key industry and tax similarities, and key differences regarding road transport greenhouse gas emissions trends. Reform recommendations made as a result of comparison not only canvass ways to establish a road transport carbon price from a legal perspective, but also the importance of using other laws and measures in the sector to support and reinforce a road transport carbon price.

This text is not only a useful resource on the specific issue of carbon taxes and mitigation of road transport greenhouse gas emissions in Australia, but also in relation to broader themes including climate change policy, legal aspects of carbon pricing, and comparative analysis for the purpose of law reform.

Keywords: climate change law; Australia; road transport; carbon price; carbon tax, Germany

Suggested Citation

Johnston, Vanessa, An Australian Road Transport Carbon Price: A Comparative Analysis (July 1, 2017). Australian Taxation Research Foundation, Research Study 50. Available at SSRN:

Vanessa Johnston (Contact Author)

Monash University ( email )


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