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Carbon controversy down under

Australian Prime Minister Julia Gillard was able to breathe a sigh of relief as her controversial carbon tax proposal finally passed through the House of Representatives and received ratification from the Senate after several previous failures and re-drafts.

The proposal, which was passed by a narrow margin of 74-72, will see Australia’s 500 biggest polluters paying AUS$23 per tonne (around £15) for their greenhouse gas emissions from 2012. After three years the new tax will morph into a trading scheme with a fixed cap on emissions.

Pledge in blood

Opposition leader Tony Abbott claims that the scheme will be disastrous for Australia’s economy, which is heavily reliant on resource extraction. He has promised that, if his Liberal Party wins the next election, they would repeal the tax. “This is a pledge in blood. This tax will go,” Abbott said, according to Reuters.

Abbott even went so far as to advise firms not to buy their carbon permits, such is his certainty that he will win office and rescind the tax.

This political push and shove is creating a climate of uncertainty for green businesses and heavy emitters alike.

Price on carbon

Despite that, many believe that the tax is a necessary step in the right direction for a country that has been struggling to implement carbon reduction policies for a number of years.

Paul Gilding, former Executive Director of Greenpeace International and Author of The Great Disruption, who has worked in environmental issues in Australia for over 35 years, believes that the carbon tax is “a crucial step in the right direction.”

“It will get Australia past the act/don't act line in the sand,” Gilding commented. “This will get companies used to the idea that carbon has a price, which will start to make its way into decision making processes.”

The scheme is also anticipated to raise revenues, some of which will be earmarked for low carbon projects.  The government plans to use money raised by the tax to plough AUS$10bn into large scale renewable energy projects and an additional AUS$250m into an existing domestic energy efficiency programme for low income households.

Talking point

The move to a carbon tax and ultimately an emission trading scheme in Australia is a timely step just weeks ahead of the UN’s COP17 climate talks.

It leaves the US increasingly isolated as a country without a price on carbon and is likely to help push forward discussions about eventual moves to linked emission trading schemes and a global carbon price.

Abbott’s forceful rhetoric could remove some of the political advantage Australia might have enjoyed at COP17 as a result of pushing through the tax.

What Abbott cannot remove is the signal that the current government is willing, and able, to push through policies that back up its commitment to reduce emissions by 5% between 2000 and 2020.


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