Tag Archives: carbon tax

Carbon price policy announced today – here’s a summary

A journey of a thousand miles begins with a single step

Let’s be clear, the carbon price policy announced today is not science-based or visionary and won’t achieve that much. However, it can genuinely be described as a small step in the right direction. If Australia is to do its bit towards achieving a safe climate future – a lot more needs to happen. Our hard work campaigning has gotten us this far, but now is not the time to be resting on our laurels.

Written below is not an exhaustive list of what the carbon price policies entail, rather a summary of the most important points as we see them.


Summary of policy package

  • $23 a tonne starting price (1 July 2012) rising by 2.5% per annum before an emissions trading scheme starts on 1 July 2015.
  • Compensation through the tax and welfare system means most people will be better off or fully compensated for any increases in costs.
  • Emissions reduction targets of 5% by 2020 and 80% by 2050 on 2000 levels.
  • Stationary energy (electricity generation and gas/oil processing), industrial processes, fugitive emissions and emissions from non-legacy (new) waste are covered by the scheme.
  • Agriculture is not covered, most transport is not covered.
  • $9.2 billion in industry compensation mainly for trade exposed industries, steel, coal and gas – reducing slowly over time.
  • Creation of the Clean Energy Finance Corporation to invest $2 billion a year for five years in “clean” energy – with at least 50% of that money to go to renewable energy. Carbon Capture and Storage (CCS – “clean” coal) is not included as “clean” energy.
  • Creation of an independent Climate Change Authority, which will advise the Government on emissions targets and report annually.


Is it better than the CPRS?

The Carbon Pollution Reduction Scheme (CPRS) put forward by Kevin Rudd after negotiations with the Malcolm Turnbull-led Coalition in 2008 was worse than nothing. There are a number of key differences with this package that make this package better:

  • For the first three years of the scheme it will be impossible for polluters to buy dodgy overseas offsets rather than pay for their pollution. When the emissions trading scheme starts in 2015 it will limit overseas offsets to 50% of the carbon liability. The CPRS had no limit.
  • Some of the coal “compensation” is conditional on the closure of 2000MW of coal-fired electricity by 2020. This means that it is likely that Hazelwood will be closed within this time (we need to make sure it is sooner rather than later!). The CPRS had no such conditions and only paid coal companies to stay open.
  • The creation of independent bodies for controlling the investment in renewable energy (Clean Energy Finance Corporation and the Australian Renewable Energy Agency) will take the decision making out of the hands of energy ministers, many of whom, like Martin Ferguson currently, have strong links to the fossil fuel and uranium industries and are biased against renewable energy.
  • The creation of independent advisory body the Climate Change Authority to advise on emissions targets and using the Productivity Commission to examine industry compensation will pressure government to improve the scheme over time.
  • Putting aside a minimum of $5 billion over five years (and maximum $10 billion) for investment in renewable energy is a good way to spend the carbon price revenue. The old CPRS had money going only to household and polluter compensation.
  • There are also a whole bunch of small components which improve on the old scheme. For example burning woodchips from native forests can no longer be counted as renewable energy. Also, the Australian Energy Market Operator (AEMO) is being forced to plan for a 100% renewable electricity grid, triggering a shift in thinking within the organisation.


Where does it fall short?

There is still a very long way to go. Some of the key problems are:

  • The target of 5% emissions reductions by 2020 is pathetically small and well below anything even closely resembling a science-based target (which is closer to 100% by 2020). There is still no vision for a zero emissions economy and a clear pathway for how we will get there.
  • The huge amounts of unjustifiable hand-outs to the big polluters remain. A lot of these handouts will go to shareholders as windfall profits at our expense.
  • Most of the fossil fuel subsidies remain untouched.
  • Large sections of our transport emissions are excluded from this package, meaning there is little incentive to reduce petrol usage.
  • There is no mechanism to stop a transition to gas rather than renewable energy. Allowing our economy to go from being powered by coal to gas is suicidal. A carrot and stick approach to gas and renewable energy, such as banning new gas plants and providing a feed-in tariff for large and medium-scale wind and solar projects is something we need to keep fighting for.


Final points

While this policy by itself won’t do much, once it has passed parliament and implemented it will represent a significant political victory over the big polluters and the climate change denier faction in the Liberal and National Parties, who have been fighting long and hard against any climate action for around 20 years. It will hopefully be a basis from which to shift the politics further towards prosperity and survival.

Word from some of the negotiators is that that without our doorknocking, emailing, rallying and phone calling, this package would have been a lot worse than it is. And of course without the hung parliament and Adam Bandt being elected in Melbourne, it wouldn’t have happened at all.


Further information

Government website

Greens website

Crikey coverage

ABC Environment

The Conversation

YCAN carbon price statement

Australians are already suffering from the impacts of climate change and fossil fuel dependence. Worsening droughts, bushfires and floods are costing lives, damaging our economy, and increasing food prices. Our reliance on oil and gas is exposing us to severe economic shocks as the prices of these fuels increase.

Australia must play its part in rapidly reducing emissions globally, or else these impacts will continue to worsen and more lives will be lost, eventually reaching a point where adaptation will be impossible.

A price on carbon is a good first step (but only a first step) towards a zero emissions economy, provided it is fair and designed appropriately. We congratulate the Labor Party, Greens and independents for committing to a price on carbon and urge them not to capitulate to the bullying and greed of the fossil fuel industry.

A fair and well-designed carbon price mechanism should result in the replacement of fossil fuel infrastructure like Hazelwood Power Station with renewable energy. To that end it must include:

  • No “compensation” for polluting corporations;
  • No right to purchase dodgy offsets here or overseas instead of paying the carbon price;
  • Inclusion of petrol and natural gas;
  • Indexed compensation for low income households so they are better off (on average) under the scheme;
  • All the money left over after low income households are compensated should be invested in renewable energy projects;
  • Indexed annual increases in the carbon price higher than the background inflation; and
  • An initial price of at least $70 per tonne to promote wind energy rather than gas. Solar energy should be promoted through other means (see below).

It is obvious that a price on carbon is nowhere near enough to get us to a prosperous and sustainable economy. Additional measures are urgently needed and should be included as part of this carbon price package. These measures must include:

  • A long-term plan for a zero emissions economy and a roadmap for how to get there;
  • An end to all direct and indirect fossil fuel subsidies;
  • A feed-in tariff for large-scale renewable energy – particularly baseload solar thermal, which is commercially available right now;
  • An end to land clearing and logging of old-growth forests;
  • A ban on new fossil fuel infrastructure, including gas-fired power stations;
  • A transition plan and job guarantees for communities and workers who lose employment and economic activity due to the transition from fossil fuels to renewable energy (renewable energy creates two jobs for every job lost in coal so it won’t be that hard);
  • A mass roll-out of energy efficiency measures, particularly for residential and commercial buildings; and
  • A shift in investment from roads to public transport, including high-speed rail between capital cities.

To send an email to the Multi-Party Climate Change Committee encouraging them to adopt this position click here.

Community Forum: the politics of pollution

What will a price on pollution mean for the community and what else will we need to do to transition to a zero emissions economy?
Adam Bandt, Federal MP for Melbourne
Cr Alison Clarke, Mayor of the City of Yarra
Richard Denniss, Executive Director of the Australia Institute
This forum will have a question and answer session after the speakers
Wednesday 4th May
6.30 – 8pm -Fitzroy Town Hall 201 Napier Street, Fitzroy
Free entry

Climate action vs. climate denial – the battle of the rallies

A climate action rally, organised in a few days, managed to bring together over 8000 people in Melbourne on Saturday 12 March. The rally was organised by GetUp, the Australian Youth Climate Coalition and various other groups in response to the push by climate change deniers, the Liberal Party and various extremist media outlets against action on the climate crisis. YCAN was there.
There was a rally held at the same time outside Julia Gillard’s office in Werribee. That rally was calling for no action on climate change and managed a far smaller 200 people. That tiny rally was addressed by two Liberal Party Senators.
While those against action on climate change make very loud noises and have large sections of the media on their side (namely the Australian and Herald Sun newspapers and several commercial radio stations), it seems that their support in the broader community is decidedly weaker than they would like to make out. See below for a short video of the pro-action rally.

A brief word on the carbon price

By YCAN Convenor Pablo Brait

The Multi-Party Climate Change Committee (MPCCC) made up of Labor, Greens and independents has just released the framework for a carbon price.  There are very few details other than the starting date of 1 July 2012 and the notion that it will be a fixed price (essentially a carbon tax) for the first three to five years before shifting to a cap-and-trade scheme. Agriculture will be excluded but all other sectors are potentially included.
Predictably the dinosaurs that make up much of the Liberal and National parties together with the usual fossil fuel corporations are launching their scare campaign against action on the climate crisis. It is unfortunate that they continue to deny climate science and lead a charge against action even as the impacts of more frequent and intense weather extremes have been hitting us hard.
It is important that carbon price debate doesn’t distract us from what we really need to do – that is, reduce emissions in line with what the climate science says is necessary. That means getting to zero emissions and taking carbon out of the atmosphere until it is back to around 300 parts per million.
A carbon price will not achieve this, although it can help.
The problem is that the Labor Party and Julia Gillard give the impression that they have no vision for a zero emissions future – rather, they just want to tick the box of climate action, appease the majority of Australians that want “something” to be done so they can move on. This is made obvious by the fact that the Labor Party still supports the expansion of coal exports and the 12 new coal-fired power stations currently planned across Australia.
Additionally, with policy settings as they currently stand, a carbon price will only achieve a shift from coal to fossil fuel gas – still a highly emitting and non-renewable fuel, with severe climate change and energy security implications. Baseload renewable energy will not be supported by a carbon price unless it is very high (around $200 per tonne), which is not politically feasible or economically desirable.
What we need is a vision for Australia to reach 100% renewable energy as soon as possible (and the Zero Carbon Australia plan shows it is possible in ten years). No policy will be good enough unless it is incorporated within this framework. To that end what is needed in addition to a carbon price includes:.

  • An end to all direct and indirect fossil fuel subsidies;
  • A feed-in tariff for large-scale renewable energy – particularly baseload solar thermal and wind, which are commercially available right now;
  • An end to land clearing and logging of forests;
  • A ban on new fossil fuel infrastructure;
  • A transition plan for communities and workers who lose employment and economic activity due to the transition from fossil fuels to renewable energy so they can continue to work and prosper in new industries (domestic renewable energy creates two jobs for every job lost in coal so it won’t be that hard).

A carbon price can help as long as it is robust and accompanied by the above initiatives. The MPCCC should design a carbon price that includes:.

  • No “compensation” for polluting corporations;
  • No links to offsets here or overseas;
  • Inclusion of petrol and gas;
  • Adequate compensation for low income households;
  • Indexed increases in the carbon price higher than the background inflation.

Thank goodness (and those that campaigned) we have a hung parliament and the Greens have the balance of power in the Senate. There would be no debate on a carbon price if that had not happened.

Greens propose interim carbon tax

The Australian Greens continue their attempts to inject some common sense into the climate change debate. Yesterday they launched a proposal for a two-year carbon tax to start in July 2010 to begin the shift towards a zero carbon economy while a longer-term policy is sorted out.

The tax will be $20 per tonne of carbon dioxide at 2005 dollars, adjusted for inflation. The Greens estimate that this will raise $20 billion over the two years, half of which will be distributed to low-income households, $4 billion would go to trade exposed emissions intensive industries, $2.5 billion to tackling climate change in developing countries and around $1 billion to an Australian climate change action fund. Unlike Labor Party policy and in line with the Garnaut Review, there is no money for coal-fired generators.

While this proposal certainly does not go far enough with regards to how fast and how deeply we must cut emissions if Australia is to play its part globally in avoiding catastrophic climate change, it is at least a step in the right direction. So far the proposals from the Rudd Government only served to lock in business as usual and corporate welfare at the taxpayers’ expense.

For more detail on the proposal click here.