Australian fossil fuel tax could raise $100bn in first year alone, Rod Sims and Ross Garnaut say

The transition to net zero could help Australia raise productivity and living standards after a ‘decade of stagnation’, Ross Garnaut and Rod Sims told the National Press Club on Wednesday. Photograph: Dan Himbrechts/AAP

A tax on fossil fuel production could help fund Australia’s transition to becoming a carbon-free energy giant, lower the cost of living and assist the world to cut greenhouse emissions, according to two veteran economists.

Ross Garnaut, a leading economist during the Hawke government, and Rod Sims, a former head of the competition watchdog, say a so-called carbon solution levy would raise $100bn in its first year alone if introduced in 2030-31 and set at Europe’s five-year average price of $90/tonne of carbon dioxide equivalent.