Published on July 22nd, 2014 | by Christopher DeMorro20
Why Australia’s Carbon Tax Repeal Is An Economic Backstep
July 22nd, 2014 by Christopher DeMorro
If any country knows the dangers of global warming and climate change, it’s Australia. The Land Down Under has been feeling the heat, quite literally, from the ongoing climate crisis. Unfortunately for the citizens of Australia, their government has voted to repeal the nations carbon tax, and that could have dire effects for the nation’s economic prospects.
Abbott’s government claims that the repeal of the carbon tax will save Australian companies and consumers $9 billion annually, but the costs of this repeal will likely far outweigh the benefits. Australia is one of the world’s largest coal-exporting nations, with much of it sent to Asia and, specifically, China. Australia itself is highly dependent on coal power, getting as much as 80% of its daily power needs from burning coal despite being one of the sunniest places on the planet. The reliance on fossil fuels puts its at risk of being left behind as other nations move forward to cap and tax carbon emissions, and the market for coal power will likely peak within the next decade. It’s also been predicted that the carbon tax repeal will actually lead to higher energy costs, not lower ones.
Formerly, government feed-in tariffs helped jump-start a lucrative solar panel installation market that has as many as 4,500 different companies ready to install a green energy system. This has led to more than 1 in 10 homes in Oz having a rooftop solar system, but with the Abbott government reducing feed-in tariffs, solar installation progress has slowed substantially. Individual Australian’s are forging ahead with plans to install their own green power system, and the Abbott government has promised more help for homeowners wanting to go solar, but the solar installation industry has seen its profit margins trimmed substantially. So while coal companies are saving billions of dollars, the nascent solar industry suffers.
The economic issues stemming from the repeal of the carbon tax will go far beyond Australia’s borders though. Much of Australia’s industry is directly or indirectly related to coal mining, an energy source that while still admittedly popular throughout the developing world, is becoming something of a global pariah. China, the world’s largest consumer of coal, has made it clear that it plans to steer its power generation needs away from coal power in the coming decades. Other growing economic players like India and Brazil are following suit, shrinking the market for coal.
This could leave few buyers for Australia’s coal as the world economy moves towards cleaner and greener energy sources, making Australia’s coal industry obsolete. Australia should be looking to export its booming solar power business to other nations, but instead Abbott has steered his country towards a future where coal remains both the dominant power source, and the economic engine of Oceania.
And let’s not forget about the health costs associated with mining and burning coal. Australia is one of the world’s foremost polluters, producing four-times as much emissions per person as the global average (49 kilos per person per day, compared to the average of 12). Doctors have raised warning after warning about the perils of mining and burning coal, but they have gone unheeded by Australia’s current government. If any nation needs a carbon tax, it’s Australia.
Unfortunately, it looks like the Land Down Under is back to square one on this issue.
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