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Published on October 12th, 2011 | by Glenn Meyers

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Australia Passes Controversial Carbon Tax

October 12th, 2011 by  


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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About the Author

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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