Increasing Australian lithium production to meet electric vehicles and net zero global targets: a decarbonisation tax discount?

Russell Smyth, Joaquin Vespignani

Research output: Contribution to journalArticleOtherpeer-review

Abstract

Current commitments with net zero 2050 require that more than two billion electric vehicles (EVs) be produced globally by 2035. Australia produces more than 55% of the global lithium in the world. We argue that Australia's most significant contribution to realising net zero 2050 could be to increase lithium production 10-20-fold by 2035. A similar case could equally be made for increasing other critical minerals. This would also contribute to securing Australia's energy and national security. To realise these benefits current investment in lithium is much lower than the production of lithium batteries used in EVs requires, reflecting suboptimal tax rates. We conclude by proposing that a decarbonisation tax discount for critical minerals is needed.

Original languageEnglish
Pages (from-to)385-389
Number of pages5
JournalEconomic Papers
Volume41
Issue number4
DOIs
Publication statusPublished - Dec 2022

Keywords

  • effective taxation rate
  • electric vehicles
  • lithium
  • net zero 2050

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