Australian PM Introduces Controversial Carbon Laws

Published by MAC on 2011-09-19
Source: PlanetArk

Australia PM Introduces Controversial Carbon Laws

James Grubel

PlanetArk

14 September 2011

Australian Prime Minister Julia Gillard introduced her government's controversial carbon tax plans into parliament on Tuesday, a third attempt to legislate a price on pollution.

Gillard has staked her minority government's future on passing the laws, which would force around 500 big polluting companies to pay for carbon emissions through a A$23 ($23.75) per tonne carbon tax from July 2012, ahead of emissions trading from mid 2015. Earlier plans to levy a tax were rejected in 2009.

If enacted, the plan would see Australia join the European Union and New Zealand with national emissions trade schemes, while the United States and Japan have smaller regional schemes.

The carbon price is the central plank in the government's plan to cut carbon emissions, blamed for global warming, by 5 percent of year 2000 levels by 2020.

The policy has the support of key independents and Greens, ensuring the plan should be endorsed by parliament.

"Today we move from words to deeds. This parliament is going to get this done," Gillard said as she introduced the first of a package of 18 bills.

A plan put forward in 2009 was twice rejected by parliament before it was shelved by former prime minister Kevin Rudd, who was dumped as party leader in favor of Gillard in June 2010.

The conservative opposition disagrees with the plan and has taken an election-winning lead in opinion polls after warning that the carbon tax will lead to job losses and push up prices.

Greens deputy leader Christine Milne said the bills would pass by the end of the year.

"The introduction of the bills comes at exactly the same time as we have scientists telling us that we are once again witnessing historic losses of Arctic sea ice," Milne told reporters.

The carbon bills, and an extra bill dealing with special assistance to the steel industry, will be sent to a parliamentary inquiry, due to report in early October.

The government wants the bills passed by the lower House of Representatives by October 11.

The upper house Senate, where the Greens and government have the numbers to pass the laws without the need of independents, has scheduled an extra week of sittings from November 7 to deal with the legislation.

The opposition accuses the government of trying to rush the package through parliament without proper scrutiny.

"It's an attempt to ram through the most controversial legislation arguably of the last 30 years, with virtually no parliamentary scrutiny," opposition climate spokesman Greg Hunt said on Tuesday, adding the government would allow less than one minute per member for each bill.

The Investor Group on Climate Change, whose members control over A$600 billion ($580 billion) of investments, said it was crucial the bills are passed, to give business and investors time to prepare for the scheme to start in mid-2012.

"We know we must achieve lower domestic emissions, send clear investment signals and support a stronger international agreement. It's time to get on with the job," group chief executive Nathan Fabian said.

Australia's scheme will cover 60 percent of carbon pollution, although agriculture will be exempt. Treasury models found it would boost the consumer price index by 0.7 percent in its first year, in 2012-13 (July-June).

Big polluting industries which are also exporters such as steel producers and aluminum smelters will receive 94.5 percent of carbon permits for free, while moderate-emitting exporters will receive 66 percent of permits for free.

The government expects the sale of carbon permits to raise A$24 billion in the first three years.

To ease voter concerns about higher prices, the government has announced A$15 billion worth of tax cuts and household assistance over the first three years.

Australia accounts for about 1.5 percent of global emissions, but is one of the developed world's biggest per capita emitters due to its reliance on coal for most of its electricity.

($1 = 0.968 Australian Dollars)

(Editing by Ed Davies and Daniel Magnowski)