AUSTRALIA – The Australian government’s carbon tax has taken effect as of 1 July, forcing about 300 of the most-polluting companies to pay a A$23 (US$24) levy for every tonne of greenhouse gases they produce.
The country’s initial price per tonne of carbon is significantly higher than other similar schemes; in the EU for example, the price is between US$8.70 – US$12.6 per tonne.
Of the 300 companies affected, those that will be hardest hit by the carbon tax include mining, steel and energy companies, as well as airlines. Local utilities bills are also expected to increase.
However, the government says the carbon tax is necessary if the country – the highest emitter per-head in the developed world – wants to tackle environmental problems and meet its climate change obligations.
Calling it a “realistic way”, Australian Prime Minister Julia Gillard said her Labor government has already seen how the carbon tax has pushed industry to find more sustainable solutions.
“Businesses have got themselves ready for carbon pricing. New investments are being made,” she pointed out, adding that her government hopes legislation will force legislation in renewable energy supplies and reduce reliance on fossil fuels.
Greens Party leader Christine Milne agrees: “It is an exciting day in Australia because this is the day that we begin to seriously tackle global warming and to price pollution. We’re going to see quite a lot of innovation across Australia and you’re going to see households, industries, people going out there creating new jobs, new ideas, and this is really the beginning of a much more positive future.”
Businesses affected will receive some compensation in the form of tax offsets and credits, while the government will also provide relief payments for middle- and low-income households.
Opposition Leader Tony Abbott maintains though that the carbon tax is an unnecessary burden on both industry and the public during tough economic times, and has promised to repeal the tax if the Coalition wins government.
“It will raise every family’s cost of living, it will make every job less secure but it won’t help the environment,” said Abbott.
“Australia’s domestic emissions will be 8% higher, yes, higher by 2020 despite a carbon tax of A$37 a tonne.
"The whole point of this carbon tax... is to kill off the coal industry, kill off the gas industry, and over time to switch entirely to renewables," he noted.
"Now, the problem with switching entirely to renewables is that they are vastly more expensive."