Can a Carbon Tax Push the Australian Construction Sector toward Self-Regulation? Lessons Learned from European Union Experiences

Abstract

In Australia, the introduction of a carbon tax has been coined as a righteous response to climate change. However, recent industry reports indicate that construction practitioners are opposed to the carbon tax and argue that it would be revenue-neutral. Whereas anecdotal evidence and facts about the effect of a carbon tax coexist, pragmatic solutions may be difficult to collate. This paper reports research intended to investigate the effects of the carbon tax on the Australian construction sector. Lessons learned from the European Union (EU) were reviewed. The findings from the literature review suggest that the carbon tax may provide a positive impulse for benchmarking emissions driven from construction activities. However, the experience from the EU also indicates that in response to the new tax, carbon emission-intensive industries such as construction are keen to find leeway to evade their responsibility. Whereas the carbon tax may arouse concerns within the construction sector, such concerns may not necessarily be integrated with behavioral change.