Australia brought in its hotly contested price on carbon emissions on 1 July. To the chagrin of industry, the ‘carbon price’ means a levy of A$23 ($22) per tonne of carbon emitted.
Part of a raft of Clean Energy Future legislation, it applies to hundreds of companies and covers most sectors of the Australian economy, including airlines and transport. The price is designed to encourage high-polluting companies to clean up their act, and boost energy efficiency.
The carbon price is controversial in a country with growing greenhouse gas emissions, whose coal-reliant electricity sector gives its citizens the biggest carbon footprint in the developed world.
Australia is also highly exposed to the effects of climate change, which is likely to bring more intense droughts and wildfires, and is fast degrading the Great Barrier Reef. Environmentalists have championed the move, which is the first stage in a full-blown emissions trading scheme.
But victory has been somewhat overshadowed by huge handouts to coal-fired power stations and free permits to trade-exposed industries such as steel makers and aluminium smelters. Reservations also remain over the capacity of Australia’s emissions trading scheme actually to deliver the overall drop in carbon that scientists say is needed to avoid catastrophic climate change. But there is little doubt that the law will help push Australia into a far greener framework.
The advent of carbon pricing in Australia is remarkable when you consider that both Labour Prime Minister Julia Gillard and conservative opposition leader Tony Abbott made a point of ignoring climate change in the lead-up to the 2010 election. But they hadn’t counted on a dead heat: Australian Greens and two independents emerged as kingmakers and agreed to form a government on the condition that Gillard consent to the introduction of a price on carbon.
The parties have agreed to introduce a cap-and-trade model in three years’ time. In theory, the market will then determine the carbon price in step with Australia’s current emission reduction targets, which currently stand at a five-per-cent reduction of 1990 CO2 levels by 2020.
But there’s a chance the carbon price will not survive its infancy. Abbott has waged an aggressive campaign against the emissions scheme, which he plans to repeal if he wins the next election due for late 2013. ■
Anna Rose is chair of the Australian Youth Climate Coalition and author of ‘Madlands: A Journey to Change the Mind of a Climate Sceptic’. www.madlands.com.au