Australia is close to passing a national carbon tax.
Yesterday, the lower house of Parliament voted in favor of it, 74-72, and it’s expected to pass the Senate next month.
The tax would affect the country’s 500 biggest polluters starting in July 2012, and it would be followed by a carbon trading program in 2015.
Initially, the biggest polluters would be taxed at A$23 (US$25) per ton, but many wouldn’t actually pay that. Aluminum and steel manufacturers and other exporters would get almost all carbon permits for free.
The coal industry would get an injection of A$1.3 billion
to help it reduce emissions and the steel industry would get A$300 million. And there’s billions of dollars in compensation for business and households in the event that electricity prices rise (expected to rise less than 1%).
The bill also creates an A$10 billion clean energy finance fund to encourage private investment in renewable energy.
The legislation allows companies to offset a percentage of emissions by purchasing carbon credits under the Carbon Farming Initiative, which rewards farmers for generating tradeable carbon offsets from agricultural projects.
Through actions like planting trees, reducing fertilizer use and cutting methane emissions from livestock, farmers would receive carbon credits to sell into the nation’s carbon trading platform. Land use in Australia accounts for roughly 23% of the country’s greenhouse gas emissions.
Major companies across many industries pledged their support for a carbon tax, including GE, Fujitsu, IKEA, Alstom and Pacific Hydro:
"As major Australian and international corporations and representative associations operating across the Australian economy we strongly support the introduction of a well designed carbon price to support the transition to a low-carbon economy.
Australia must aim to be globally competitive in clean energy, energy efficiency and low carbon technology. Pricing carbon is critical to providing business certainty and unlocking the jobs and investment that will accompany the transition to a prosperous, cleaner and internationally-competitive economy."
Australia is the world’s top greenhouse gas (GHG) emitter per capita because it relies on coal for 80% of its electricity.
Australia is the highest emitter of carbon per capita in the world. The country has committed to cut GHG 5% below 2000 levels by 2020 and 80% by 2050.
If passed by the Senate, Australia would join the European Union and New Zealand as the only countries with national emissions trading programs.
Conservatives, who are leading in the polls, say they would immediately dismantle the tax if elected in 2013.