Australia rolls out carbon tax – unambitious but better than nothing!


The Australian parliament passed the Clean Energy bill, 2011 during the week – the effect of which will be to introduce a carbon tax there commencing in July of 2012. The bill still has to be ratified by the senate but with Julia Gillard’s government and the Australian Green party holding a significant majority of seats in the upper house, this is expected to be a formality.

The tax will initially price carbon at A$23 (?17) per tonne in 2012-13, A$24.15 in 2013-14 and A$25.40 in 2014-15. Carbon trading will commence in 2015-16 with a price floor of A$15, rising by 4% per annum.

The interesting thing about this carbon tax implementation is that rather than it being a burden on the tax payer, Australia introduced a series of extra payments and compensations for family’s which will see most workers earning up to A$80,000 (?59,350) a year receiving an extra A$300. This will benefit the less well off the most because:

The tax-free threshold for wage and salary earners to rise from A$6,000 a year to A$18,200 from July 1, 2012, and to A$19,400 from July 1, 2015.

This way of implementing a carbon tax is one I have been advocating for some time but it is not always popular. In fact, when I brought it up at the Green Economy 2011 conference in Dublin earlier I was pooh, pooh’d by former UN Climate Change chief, and current global advisor on climate change for KPMG Yvo De Boer, who said in an uncharacteristically misanthropic comment “Experience tells us that is you give people more money, they will go down to B&Q’s and spend it on patio heaters”. While it may have been a facetious comment, it fails to take into account that, if there is a proper price being levied on carbon, then the problem of the purchase of porch heaters quickly solves itself.

Back to the Australian carbon tax – kudos must be given to Oz for getting this law through parliament despite what must have been one of the most dishonest and vitriolic anti-science campaigns yet mounted against climate change. As Graham Readfearn notes:

They paid millions of dollars for adverts on television, in newspapers and online. They flew in climate change deniers from across the globe. They held rallies, engaged prominent right-wing media personalities, threatened scientists and turned the cold non-partisan findings of peer-reviewed science into some kind of blood sport.

But despite what was surely the dirtiest and most dishonest campaign ever waged before the Australian public, from next July major industrial emitters of greenhouse gases (about 500 of them) will have to pay $23 for every tonne of their pollution under laws passed earlier today.

The fact is that the Australian example is extremely unambitious – a starting price of ?17 per tonne of CO2 and a goal of reducing Australia’s emissions 5% by 2020? The bill scraped through parliament by the slenderest of majorities (74-72) so it is likely that any proposals seen to be more demanding would have failed.

Having said that, Australia has passed a carbon tax. That’s more than we can say for most other countries.

Well done Australia.

Photo credit Francesco Cavallari Photography ?