Yesterday (10th July, local Oz time), the Australian Prime Minister, Julia Gillard announced the government’s new policy on the pricing of carbon pollution.  It will be legislated later this year.  It is expected to go through and will come into effect less than a year from now, on July 1st, 2012.

Some details:   Approximately 500 heavy polluting companies will be levied at an initial rate of Oz $23 per ton (about US $24) of carbon dioxide emitted.  The levy will be in place for 3 years, and will rise each year.  After the initial 3 year period, the policy will morph into an emissions trading scheme with a national cap set on carbon pollution.  The BBC writes that

The Australian government’s aim will be to cut 159m tonnes of carbon pollution by 2020, reducing emissions by 5% below 2000 levels.

and, further out, by 2050, by 80% below 2000 levels.

Prices of various goods are expected to rise as some of the cost is passed down to the consumer, and therefore a significant portion (something around half) of income raised by the government will be distributed (tax breaks, cash payments) to low- and middle-income households.

The impost is expected (and this is the whole point …) to drive heavy polluters into cleaner ways of production, as they seek to find ways of avoiding the cost of the levy.

Over $10 billion of expected income raised will go towards research into and development of low carbon technology.

There will be some assistance for high polluting companies that are “trade exposed”, so that significant exporters are not unduly penalized on the international market.

As Australia is the highest per capita polluter in the ‘developed’ world (as it often said, and I think that must mean in the world as a whole), the move is welcomed by environmentalists and, in particular, the Australian Greens – who hold the balance of power in the new national Senate, who have one member in the House of Reps, and who helped design the policy. Also assisting in its design (apart from the governing Labor Party) were several independent MPs who help Labor form government.

That’s the gist of it, as I understand it (corrections welcomed in the comments). Here’s BBC’s initial report on the matter.

Cross-posted on DK.

Roger Lamb

Roger Lamb

1 Comment