CANBERRA, Australia — Tony Abbott, the Prime Minister of Australia, announced on July 17 the repeal of carbon tax. Australia now has the distinct recognition of being the first developed country to repeal carbon pricing on greenhouse emissions. The Australian Senate voted to repeal the act with a 39-32 vote after years of deliberation regarding climate change.
The climate change debate has had a long history in Australian politics. First suggested in 2007, the controversial carbon tax has resulted in the fall of three Australian leaders. The carbon-pricing scheme was finally introduced under former Prime Minister Julia Gillard and the Labor Party in 2012, promising to slash emissions by 160 million metric tons by 2020. The scheme also included numerous tax breaks and welfare payments totaling billions of dollars of aid to compensate for the consequential increasing costs.
After the 2008 global recession, public opinion toward the climate laws became negative, blaming them for rising energy bills and living costs. In reality, the Associated Press found that although power bills did increase dramatically, the tax was only a small fraction of that increase.
Advocating growth over climate change reform, Tony Abbott ran on a conservative platform, defeating Former Labor Prime Minister Kevin Rudd.
After entering office, Mr. Abbott gave a “pledge in blood” to repeal the carbon-pricing scheme. With the repeal of the “useless, destructive” tax, the country now no longer has any legislative policy in place to meet the minimum five percent greenhouse emissions reduction settled upon in international agreements.
The bill originally imposed approximately $21.50 tax per metric ton of carbon dioxide on around 350 of the nation’s worst polluters. Just before it was repealed, the tax had increased to $23.47 this month. Now the government is expected to forgo $7 billion in tax revenues over the next four years.
To meet the five percent emission reductions, the government now intends to draft a Direct Action competitive grants policy. The government hopes to encourage businesses to reduce pollution, rather than punish them for pollution. The policy would offer $2.5 billion in competitive grants over the next four years that would reward businesses that voluntarily reduce emissions.
However, Mr. Abbott has repeatedly refused to rule out the possibility of a new carbon tax in the future. He calls his government “conservationist,” and “will do what we think is the sensible thing to try and bring emissions down.”
Although the repeal has been met with widespread criticism, representatives from numerous major industries heralded it as good news. Many felt the tax resulted in high costs being passed to businesses.
Australia has been one of the largest producers of carbon emissions. In 2011, Australia emitted approximately 18.0 metric tons of carbon dioxide per capita, only behind Saudi Arabia with 19.7 metric tons per capita. That number is now approximately 25 metric tons per capita.
For now, Australia’s future environmental policy is unknown and whether the situation worsens or a more effective policy is enacted remains to be seen.
– William Ying