In November 2011, Australia, along with the whole world, saw a historic law being passed - the Carbon Tax! Hailed by some and criticized by many, the Carbon Tax, which was debated and discussed for almost over a decade, finally saw the light of day. Outside the European Union, Australia is only the second developed nation that has enacted carbon pricing. So what exactly is this carbon tax and how is it going to impact the Australian economy and environment?
From 1st of July 2012, Australia's top carbon emitting companies - the companies who emit more than 25,000 tons of carbon dioxide - will have to pay A$23 (which will gradually be increased by 2015) per ton of the carbon emitted. The only exceptions to this law will be agriculture and forestry related companies and the ones worst affected will be mining, cement, aluminum, steel and energy industries. And the goal of the carbon pricing program? To reduce the carbon emissions by 160 million tons till 2020! It is also said that this program will replace some part of Australian income tax which means that almost a million Australian taxpayers won't be liable to pay any income tax. The government is also expecting the tax to garner around A$1.6bn by 2015 that will be directly passed into public finances.
Now the real question arises - Will the Carbon Tax really prove to be as propitious as touted? The biggest blow of the tax will be faced by manufacturing industries where it is predicted that 90% of the industries will be negatively impacted. Around 950,000 industrialists claim that with the added burden of Carbon Tax, it will be difficult to compete with the international companies, who are not required to pay additional taxes.
Globally, Australia is one of the highest emitter of greenhouse gas emission as it is heavily relies on coal. In 2009-10, valued at an estimated A$36.4bn, coal was the second largest export of Australia, employing around 140,000 people. Reports state that the carbon tax will jeopardize more than 21,000 jobs in coal mining and associated businesses within next 10 years. It is also said that tax schemes, like the one introduced, may create around 10 years of 'temporary unemployment' and 100,000 lesser jobs. Insiders feel that, Australia will lose its competitive edge as other emission-emitting countries are not taxed in the same way.
US President Barack Obama has praised Australia for its "bold strategy" and Europe has applauded the Carbon Pricing program. But as far as these countries are concerned with taking action on carbon emission - EU is 'still obtaining 98% free permits', Japan has 'delayed', US has put it on 'standoff' and Canada is 'awaiting for US'. And that's the reason why most Australians are criticizing their government for implementing the carbon tax, when most of the countries are still 'contemplating' on it. The ill timing, job cuts, losing competitive edge and the futileness against the global carbon emissions is what is making Australians skeptical about the whole Carbon Pricing scenario.
