Australia’s parliament approved a controversial pollution tax yesterday after years of bitter debate over the reform, which is aimed at lowering carbon emissions blamed for climate change.
Cheers and applause broke out as the upper house Senate passed the Clean Energy Act, requiring Australia’s coal-fired power stations and other major emitters to “pay to pollute” from July 1 next year.
Australian Prime Minister Julia Gillard said it was the culmination of a “quarter of a century of scientific warnings, 37 parliamentary inquiries and years of bitter debate and division.”
“Today, Australia has a price on carbon as the law of our land,” she said as the tax, which scraped through the lower house last month, was approved by the Senate in a 36-32 vote.
“Today, we have made history — after all of these days of debate and division, our nation has got the job done,” Gillard said.
Gillard said the scheme — which will levy a price of A$23 (US$23.80) per tonne on carbon pollution before moving to an emissions trading scheme in 2015 — would begin to address “the devastating impacts of climate change.”
She said the reforms, which include investment in renewable energy sources, would result in Australia cutting its carbon emissions by 160 million tonnes in 2020 — equivalent to taking 45 million cars off the road.
The government hopes the levy will create economic incentives for the biggest polluters to reduce their emissions, but acknowledges that businesses will factor the carbon price into the cost of their goods and services.
To offset this, much of the revenue raised from the tax in the first three years will provide for higher family payments, pension boosts and income tax cuts to help pay for the higher cost of living.
Only New Zealand and the EU have taken comparable economy-wide action by introducing cap-and-trade schemes, and the tax will put mining-driven Australia at the forefront of efforts in the Asia-Pacific region.
“This is a big achievement, coming at an opportune time,” said professor John Quiggin, an economics and tax specialist from the University of Queensland. “With South Korea planning to follow suit, momentum toward carbon emission reductions in the Asia-Pacific [region] is starting to build.”
Yesterday’s senate vote capped a tumultuous period in Australian politics, largely centered on how the vast nation, which is among the world’s worst per capita polluters, should tackle carbon emissions linked to global warming.
Former Australian prime minister Kevin Rudd harnessed an unprecedented wave of popular support for climate change action in 2007, winning elections in a landslide after campaigning to ratify the Kyoto Protocol and take other green measures.
However, his plans were frustrated by entrenched conservative opposition that led to him shelving a proposed emissions trading scheme, damaging his credibility. He was ousted by Gillard in a Labor party-room coup last year.
Gillard went to the subsequent election promising there would be no carbon tax, but later flip-flopped, saying it was a necessary first step toward a flexible carbon pricing scheme.
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