Carbon Tax Passes Last Hurdle In Australia

The energy picture in coal-crazy Australia could be in for a big shakeup. With passage in the Senate, a carbon tax is now set to become law and take effect in July 2012.

The legislation, which was fiercely fought by industry, will require Australia’s 500 biggest polluters – excluding the agriculture sector – to pay $23 for every ton of carbon they emit. The tax will rise 2.5 percent per year until 2015, at which point an emissions trading scheme will be instituted, tying in with such systems in New Zealand and Europe.

carbon tax, australia

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Passage of the carbon tax in the Senate “paves the way for one of the most important environmental and economic reforms in Australia’s history,” the government said. “It represents a major milestone in the nation’s bid to reduce emissions and capitalize on the economic and job opportunities that will result from pursuing clean energy solutions.”

According to the Energy Information Administration, Australia, with the world’s 52nd-largest population (22.5 million), was the 12th-largest consumer of coal in 2010 – providing 80 percent of the nation’s electricity.

The opposition leader Tony Abbott has vowed to repeal the tax if his center-right Liberal Party can regain power. But the government moved to make the tax palatable to voters by focusing it on big polluters and by funneling receipts from the tax back to the people. “It is a tax on pollution – not on individuals, households or small businesses,” the government said. “For most people, the government’s comprehensive Household Assistance Package will cover, and in many cases exceed, any price rises. Nine out of 10 households will receive compensation from a combination of tax cuts and increases to family benefits.”

From Robert Reich on the left to Gregory Mankiw on the right, economists overwhelmingly agree that a carbon tax that helps reflect the true costs of fossil fuels use would be the most efficient tool to use in spurring clean-energy development.

Sports columnist, newspaper desk guy, website managing editor, wine-industry PR specialist, freelance writer—Pete Danko’s career in media has covered a lot of terrain. The constant along the way has been a fierce dedication to knowing the story and getting it right. Danko's work has appeared in Wired, The New York Times, San Francisco Chronicle and elsewhere.

  • Politiciansallsuck

    wow..stupidity knows no boundaries. Those poor fool voters were lied to. Paying money will not clean the air. Aren’t we (the world population) paying enough for everything yet? Prices keep going up, but not my pay.u00a0

  • Politiciansallsuck

    Guys like Robert Reich are screwing people left and right. What voters don’t get is that guys like Robert Reich, who make way more money than most of us will never make, and get most of his benefits and perks paid for by Taxes, will not be burdened by higher taxes, he is an elitist. Do you think that he even pays for his air fares when he travels? Voters are getting raped..all over the world. Sad.

    • http://twitter.com/petedanko Pete Danko

      That makes no sense. In fact, the proposals by liberals are to tonincrease taxes on rich people, the people “who make way more money than most of us willnnever make,” the Robert Reich’s of the world. Anyway, you’re missing the point of the Reich citation, which is that it’s widelynagreed by poeple on the left and the right that a carbon tax is the bestnmechanism for letting the market move us toward a clean energy future. JerrynTaylor of the libertarian Cato Institute, who as far as I know doesn’t get ancent of your tax dollars, wrote: “If reducing our carbon footprint is the goal, thennthe most direct and efficient means of reducing that footprint is to impose antax on carbon emissions and then leave it to the market to sort out how to mostnefficiently order affairs under those new prices.u00a0Maybe it will mean windmills and CNG [compressednnatural gas], but maybe not.u00a0Perhaps it will mean more nuclear power, newnhydrogen-powered fuel cells, “clean” coal, the emergence ofncellulosic ethanol, battery-powered cars or hybrids — or a continuation of thenexisting energy base but less consumption as a consequence.u201d THAT’s the point.u00a0