THE AUSTRALIAN government has unveiled one of the world’s most ambitious schemes to tackle climate change, a plan to tax carbon emissions from the country’s worst polluters.
After a bruising political battle to win support for the measure, the prime minister, Julia Gillard, said yesterday that from July next year, 500 companies would pay $23 (€17.30) a tonne for their carbon emissions in the largest emissions trading scheme outside Europe.
The government predicts that by 2029 the plan will lead to a reduction in emissions equivalent to taking 45 million cars off the road. The government will fix the tax for three years, before moving to a market-set price in 2015.
Australia generates more carbon pollution per head than any other developed country, thanks to its heavy reliance on coal-fired power stations. With a population of 22 million, Australia is responsible for 1.5 per cent of global greenhouse gas emissions.
By comparison, Britain, with nearly three times the population, produces just 1.7 per cent.
The package is expected to pass votes in both houses of parliament before the end of the year, but Gillard faces a furious backlash over the scheme, which 60 per cent of the population opposes. Her government is the most unpopular in 40 years and analysts say her political future depends on her ability to sell the tax to voters.
“We’ve got to price carbon pollution to drive investment in innovation and to provide the incentive for energy efficiency,” she said. “Failing to do so means that we would be passing on lower living standards to our children and grandchildren.” The scheme provides for a $10 billion clean energy fund, money for a biodiversity fund, and – crucially for Gillard’s political survival – compensation for voters.
The average household will see its bills increase by around $10 a week and critics of the plan say ordinary voters will be unfairly burdened by higher costs passed on to them by the big polluters.
But Gillard said 50 per cent of the scheme’s revenue would be returned to households in the form of tax cuts and compensation worth more than $15 billion. Two-thirds of all households would receive enough assistance to cover the entire financial impact of the tax, Gillard said.