Australia Passes Controversial Carbon Tax

October 12th, 2011 by Glenn Meyers

CO2 emissions per capita, per country

Following the initiative of Prime Minister Julia Gillard, Australia’s Parliament today passed a plan to cut carbon to 5 percent below 2000 levels by 2020.

As drafted, Australia’s 500 leading greenhouse gas emitters will pay $23 (AUS$1 = US$0.99) for every ton of carbon they emit. The carbon pricing is set to take effect next July, assuming the Senate agrees in November, as expected.

The bill is regarded by many as a huge environmental step for Australia, the world’s largest exporter of coal and one of the leaders in greenhouse gas emissions on a per-capita basis.

Government estimates the carbon price will cost Australian households around $10 per week. However, the bill also returns more than half of the revenue raised to people via a number of tax credits and direct payments.

The net result of this legislation makes burning fossil fuels more expensive. It is hoped efficient technologies and renewables will be encouraged. According to Labor estimates, Australia’s carbon emissions will be reduced by 159 million tons in 2020, or 5 percent of all emissions.

The idea of taxing carbon has been a divisive issue in numerous countries, particularly ones that produce high levels of greenhouse gases (see map). The bill (part of a large package) passed by a 74 to 72 margin.

Insiders say the carbon taxation plan is a political gamble for Gillard, whose popularity in public opinion polls declined when she introduced the carbon tax in July.

On the conservative side of the government, Federal Opposition leader, Tony Abbott, has promised to ditch the tax if he wins office. “We can repeal the tax, we will repeal the tax, we must repeal the tax,” Abbott after Wednesday’s final vote. “I am giving you the most definite commitment any politician can give that this tax will go,” Abbott promised, calling his words “a pledge in blood.”

Business reaction to the legislation has been mixed, in part, because some entities stand to benefit from new markets that are created.

As reported by Ray Brindal of The Wall Street Journal, Frank Jotzo, Director of the Center for Climate Economics and Policy at the Australian National University, has said such carbon pricing legislation will give businesses more certainty for their investments. It is also reasonable to expect some large resource companies and financial entities will do quite well from new markets that will be emerging, especially on the renewable energy side of the fence.

Map: Wikimedia Commons

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Tags: australia carbon tax, Center for Climate Economics and Policy at the Australian National University, climate change issues, greenhouse gases, Julia Gillard, renewable energy benefits, Tony Abbott

About the Author

Glenn Meyers is a writer, producer, and director. Meyers was editor and site director of Green Building Elements, a contributing writer for CleanTechnica, and is founder of Green Streets MediaTrain, a communications connection and eLearning hub. As an independent producer, he's been involved in the development, production and distribution of television and distance learning programs for both the education industry and corporate sector. He also is an avid gardener and loves sustainable innovation.

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Anonymous

Aussie solar is second only to the Sahara. Look at the insolation map.
johnh

Does the author mean to say “ton of carbon” or “ton of carbon dioxide”?

$23 per ton of CO2 is $84 per ton of carbon, but $23 per ton of carbon is only $6.27 per ton of CO2. If you mean CO2 please don’t say “carbon”, there’s a big difference.

According to the Stern Report (UK) the actual social and environmental cost for CO2 is $180 per ton, that’s equal to over $600 per ton of carbon.
- Grmeyers
  
  Thanks for the comment. I meant CO2 and appreciate your reference to the Stern Report. G
Anonymous

Businesses in Australia can’t have more certainty for their investments when the Australian media give more air time to the political idiot saying he’s going to “repeal the tax” and the next Federal Election is only 2 years away…. Like in the US, with Federal Elections a ridiculously frequent every 4 years but the sort of structural changes required to tackle Carbon requiring 10-15 year investment time lines, the vested interests of the status quo, causing the political system to be paralysed, has now become the biggest source of instability in society!
- Anonymous
  
  hmm, that does sound familiar.
  
  ugh..
- Tom_Garven
  
  tsport100:
  
  There are many people in America who probably wished the presidential elections were held every 2 years instead of 4, LOL Some people are not in love with the leadership capabilities or political agenda of our current president.
  
  It’s not that he hasn’t tried; but you just can’t go around making comments like – ‘under my plan electric rates will necessarily skyrocket’ if you are looking for support to implement something like Cap & Trade. Personally I believe a Carbon Tax would work far better for America and get much more support if the tax was structured in such a way that the money could ONLY be used for the CONSTRUCTION of renewable energy systems. To me it doesn’t make any difference HOW we reduce our use of carbon based fuels, it only matters that WE DO.
  
  Our Congress only has a 17% approval rating so I don’t think the American people would be too happy to turn over many more billions of their money to politicians to manage who would probably skim 20% right off the top of some program like Cap & Trade. Instead take the money from my hand [carbon tax] and give it to someone building a renewable energy system – I will vote for that, LOL I will NEVER vote for some giant trading program ripe with ways to game the system. Sorry to say this but yes I am in the 17% of people who don’t trust their politicians. Politicians in America are interested in only one thing and that is getting reelected. I read somewhere they spend MORE than 50% of their time on reelection. I also believe in 4 year term limits. I don’t believe our founders ever envisioned retirement plans for member of Congress.
  
  When the right individual is elected faster carbon reduction will occur. And please don’t ask me if it will be a Democrat, Republican or Independent since we are WAY to far away from the next election. Check back with me in 10 months, LOL. We don’t even know if some Democrat will even challenge our current president. Besides, I vote for an INDIVIDUAL and not a PARTY. A PARTY is just an organization while an INDIVIDUAL can be a leader and gets stuff done.
  
  Have a great day tsport100