Gillard announces interim carbon tax to tackle carbon pollution and climate change

Australia is to get a carbon tax from 1 July 2012 as one cornerstone policy for tackling the challenges of climate change, announced Prime Minister Julia Gillard, Greens leader Senator Bob Brown, and Independents Rob Oakeshott and Tony Windsor in Canberra yesterday. The interim carbon tax is proposed to run for 3-5 years, rising by a set amount each year, to be followed by a full cap and trade emissions trading scheme linked to international markets. There would be no international offsets allowed for the interim mechanism and agricultural emissions would initially be excluded from the tax.

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While the date for the introduction of the carbon tax has been announced, many of the details are still to come including setting the introductory carbon price rate, the level of compensation for households and businesses, and the emissions reduction target for 2020. The agreement is a compromise worked out by the Multi-Party Climate Change Committee set up after the last election composed of the Labor Party, the Greens and Independent MPs.

"If you put a price on something, then people will use less of it. At the moment it is free to emit carbon pollution. If we price carbon pollution, then people will find ways of emitting less of it because they won't want to pay the price." said Julia Gillard who is determined to bring in a carbon pricing mechanism as the issue has been pivotal in four party leaders losing power (Howard, Nelson, Turnbull, Rudd). "I'm determined to do it, because climate change is real. We have never before lived with so many people on the planet emitting so much carbon pollution."

The carbon pricing mechanism will be budget neutral with money raised returned to compensate households and some businesses. There will be a great deal of debate on the extent of this compensation, especially to business and industry.

A Grattan Institute report released on April 22, 2010 - Restructuring the Australian Economy to Emit Less Carbon - was the final nail in the coffin of Kevin Rudd's CPRS scheme in part due to the large extent of the business compensation package. "The assistance package under the Government's proposed carbon trading legislation for emissions intensive industries is a $20 billion waste of taxpayers' money", said the CEO of Grattan Institute Professor John Daley on the release of the report. "Concerns that a carbon price will devastate industry and households are misplaced and exaggerated. They are no basis for delaying adapting the Australian economy to its carbon constrained future." (The Rudd retreat on climate policy: scientists and conservationists react)

The Greens proposed in January 2010 an interim carbon tax as a compromise to break the senate deadlock in the previous parliament.

The Labor Government is still intent on just a 5 per cent reduction in carbon emissions below 2000 levels by 2020, while the Greens urge a 25 per cent reduction by 2020. The International Panel on Climate Change recommended rich countries should cut emissions by 25-40 per cent below 1990 levels by 2020 which was adopted by the 2007 Climate meeting for the Kyoto Protocol meeting in Bali.

A report released in October 2010 found that Australia is falling behind in indirect carbon pricing in the electricity sector.


Conservationists cautiously welcomed the announcement, "The decision to introduce a price on pollution from July next year is an important start to the job of tackling Australia's greenhouse emissions," said ACF Executive Director Don Henry in a media release. "At present Australia is on track to increase our pollution levels 24% by 2020. If we are going to turn that around, we need to get cracking. A fixed price on pollution, while an important step that will help business adapt, does not on its own ensure greenhouse pollution levels will fall. We need to move from a fixed price to a cap on pollution sooner rather than later."

"Today's announcement is extremely welcome and shows good progress but we're not through the minefield yet," said The Climate Institute CEO John Connor in a statement. "By making it clear that businesses will be responsible for their pollution with an initial permit price is an important foundation as is the focus on actual pollution reduction."

The Climate Institute urges an initial pollution price of more than $25 per tonne. "Without a credible initial pollution price of greater than $25/tonne we will not unlock billions of dollars new investments and thousands of new jobs in new clean energy and low pollution industries. " said John Connor.

Environment Victoria Campaigns Director Mark Wakeham called for a starting price of $50 per tonne. "The starting price will be critical in determining whether emissions rise or fall in the next 5 years. Environment Victoria supports a starting price of at least $50 per tonne, which is what Treasury estimated would be needed to reduce emissions by 25 percent by 2020. Unless we start the scheme at this sort of price, and have the ability to increase it over time, we will have no hope of achieving the sort of emission reductions that Australia and other nations will need to meet to stabilise our climate."

Tony Abbott has declared his opposition to the introduction of the carbon tax, with scaremongering over it's impact on living expenses. "Today she has broken her promise - and all Australians will now pay for that broken promise with higher electricity and petrol prices. Let us be clear, what the Prime Minister announced today is a carbon tax. From the middle of next year, Australian families will pay $300 more for power each year." he said in a media release. Gillard has replied that the biggest portion of the revenue raised would go to compensating households.

As long as Julia Gillard keeps the Greens and some of the Independents onside in the negotiations, the legislation should pass through both houses of parliament. From July 1st, 2011, the Greens will have 9 Senators with the balance of power in the Senate.

Professor John Quiggin from the School of Economics at the University of Queensland commented "This is a sensible way of tackling the problem. A carbon tax can be introduced rapidly, and the public will quickly realise that all the scaremongering about its effects has been overblown. With a price in place, the government can take time to design a workable system of tradeable emissions permits, compatible with developments in other countries."

Christine Milne, Deputy leader of the Australian Greens, called the agreement "a major step towards real climate action in Australia...." but urged a community campaign to push for a high enough carbon price to achieve a carbon target that climate scientists suggest we need to aim for to mitigate climate change. Milne also emphasised the importance of complimentary measures such as the renewable energy target, national gross feed-in tariff, and energy efficiency targets"

"The carbon price would cover the energy sector, transport, industrial emissions and waste. There is agreement to support change in the land-use and forestry sectors but details are still under consideration." said Christine Milne in a media release. "The agreement sets out points for compensation, including helping the community meet rising costs of living, but the details are still to be determined.

"This is a big step forward for climate action in Australia. For the first time, everybody in Australia will have a clear signal that the old, polluting ways will have to change and a new, exciting era is set to begin." Senator Milne concluded.

Not all environmental groups have endorsed the proposed carbon pricing mechanism. Activist group Friends of the Earth said that the interim carbon tax leading into an emissions trading scheme takes Australia in the wrong direction, and away from real solutions to the climate crisis.

Climate justice spokesperson Holly Creenaune said, "We're concerned this is a resurrection of the Carbon Pollution Reduction Scheme (CPRS), which was rejected in the Senate and failed to win public support because it was worse than doing nothing."

Holly Crenaune highlighted the problems in carbon trading, "Carbon trading does not work - across the world cap-and-trade has failed to reduce emissions, harmed local communities and delayed real action; whilst delivering huge profits to polluters and financial speculators."

Friends of the Earth UK released a report in November 2009 - A Dangerous Obsession which highlighted the dangers of carbon trading.

"The MPCCC framework repeats the mistakes of the CPRS by handing over revenue to big polluters, on top of other loopholes like cheap offsets." said Crenaune. "We welcome the exclusion of international offsets from the interim carbon price. However, by allowing domestic offsets in the initial phase, expanding to a carbon market riddled with international offsets, polluters will avoid reducing emissions at the expense of communities displaced and affected by damaging offset projects."

"Today's agreement foreshadows a low price on carbon - and no political parties are currently committed to a substantial price. With a low price on carbon, Australia's emissions will continue to rise." Crenaune warned.

"Competitiveness and energy security for polluters are clearly the main considerations in setting the price - ignoring the serious impacts of climate change and regulatory action needed to transition away from fossil fuels."

"We want to see effective and just solutions on the table - solutions that phase out coal-fired power, that stop the expansion of coal mining; that protect our rivers, farmlands, and health from fossil fuels extraction; and drive the rapid growth of renewable energy in Australia. These solutions include direct investment in renewable energy and an end to fossil fuel subsidies." concluded Holly Crenaune.




The only good thing about the carbon tax is the Greens will never have power again they will be kicked out at the next election with Labour .
The Greens will meet the same fate as the Democrats did and thats a good thing!!!!

If you want to stop carbon pollution instead of screwing the Australia people stop selling coal to China.What a con Job!!!!!!

FYI only a tiny portion of Australia's coal exports go to mainland China. Most go to Japan and South Korea. China is the world's largest coal producer and until very recently was itself a net exporter of coal.

It would "screw" Australia's balance of payments to stop exporting coal, which is our largest single exported commodity and makes up over 10% of our exports by value.

By contrast, domestic energy consumption (the only thing which gets more expensive with the introduction of a carbon emissions tax) is a very small portion of the expenses of most Australian individuals and businesses, less than 1% of the costs of 99% of employers. Low-income households and those businesses which do spend a lot on energy (transportation and heavy manufacturing) will receive some compensation but will still have an incentive to use more efficient and/or less carbon-intensive technology.

Mean while China, India ,Russia and America do nothing You may as well get a bucket and try to empty the sea you got a better chance.
And what are they going to do with the money from this tax? Use it to research alternative energy of course not they will put it in their pockets because they know it's a con.

The Australian public (knuckle Heads) fell for the Ozone layer crap now where has all the doom and gloom gone from that ?
And now you have fallen for Global warming or did we change that to climate change because the Earth is getting cooler?
It we cost me an extra $300 a year in electricity thats $5.75 a week extra big deal that wont make me change my electricity use and a extra 6 cents a litre in petrol that wont make me sell my V8 car.All it will do is line the pockets of the Government.
The only ones this will effect is the poor pensioners which is wrong and the greenie uni students blind justice I say.

The ozone layer has been saved by the Montreal Protocol of 1987 which restricted the manufacture of chlorofluorocarbons and has all but eliminated them from industrial use. There are still some minor applications for them in semiconductor manufacture and as fire extinguisher propellants.

It was relatively inexpensive to replace these gases in industrial use, and indeed the change helped reduce greenhouse gas emissions as well (since the replacement hydrocarbons, if released into the atmosphere, oxidise relatively quickly).

Reduction of greenhouse gases in general, however, is much harder as there is no really inexpensive replacement for fossil fuels. Energy costs must increase, and very powerful people must lose a lot of income and influence, if fossil fuel consumption is to decline.

REAL planet loves are happy and relieved the crisis is averted.

REAL Liberals don't bow to fat American politicians promising to lower the seas and make the weather colder with TAXES.

REAL civilized people don't threaten their kids with a CO2 death, just to get them to turn the lights out more often.

REAL civilized people spread love, not fear of SAVE THE PLANET.

Meanwhile, the UN had allowed carbon trading to trump 3rd world fresh water relief, starvation rescue and 3rd world education for just over a quarter of a century of climate control instead of needed population control.
System Change, not climate change.

I must have struck a raw nerve with this article to get the climate deniers jumping and people resorting to abuse.

Its not so much denying climate change exists takver- many people are just arguing that slugging Aussies with a massive new tax is unlikely to make a noticeable difference to global climate change as a whole- given that we account for 1.5% of world emissions and that the India's, China's and America's of the world will continue to trash the environment with their emissions.

Takver can you explain how this carbon tax will reduce carbon? I still need my car to get to work as public transport can't get me there (I live in Kinglake Victoria),and my electricity use will not drop as I only use what i have to now.
I am not a climate change denier forgive me but it just looks like another grab for money by the Government.

>I only use what i have to now.

how much?

I was doing that before a carbon tax electricity has already gone up before any carbon tax whats you point?

>whats you point?

i suspect you are exaggerating how little electricity you use.