In order to mitigate against global climate change, this paper argues that net-zero is inevitable, by 2050 or even earlier. To get there, the Australian economy will need to undergo a tremendous structural transformation.

This consultation paper is the first under Blueprint Institute’s new energy policy initiative. It sets out the decarbonisation challenge Australia faces in the decades ahead, and how we might confront it.

Australia is at a critical juncture. The COVID-19 crisis has cut short three decades of uninterrupted economic growth. This paper argues that Australia will require wide-reaching reforms that were necessary before the crisis, and are now more critical than ever before.

I define a new tax instrument, the ‘deductibility rate’, which specifies the proportion of eligible expenses a taxpayer may deduct when preparing her taxes. If the utilities of gross income and deductions are separable, then the deduction elasticity reflects the revenue leakage caused by greater deductibility. To identify this elasticity, I develop the first method...