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AUSTRALIA

Carbon tax saves Gillard (for now)

  • 14 September 2011

My most recent Eureka Street articles on climate change policy (Celebrating the carbon tax and Gillard's climate coup) set out reasons for my optimism that, following the formation after the 2010 election of a minority Labor government under Julia Gillard which owed its continued existence to the support in Parliament of the Greens and Independents, Australia would at last be able to make progress towards legislating a carbon pricing system.

The arguments of those two articles have been borne out by events, though only after the real danger of Tony Abbott's 'stop the carbon tax' campaign, which seemed to be gathering public momentum, was surmounted.

In recent months, under Greg Combet's quiet but deft policy leadership, aided by Ross Garnaut's and Christine Milne's authoritative public education on the real issues, Australia has at last, after 17 years of debate, reached 'the end of the beginning': 18 bills have been drafted expressing the present Labor-Greens-Independents policy consensus that a carbon pricing system be put in place, to commence in July 2012.

These bills will now have a month of debate in each House of Parliament. Barring the unforeseen, they will become law in October. The Greens and Independents will support these bills.

The bills will set in place a carbon tax on about 300 firms (Australia's top emitters) for three years at an initial price of $23 per tonne of CO2 emissions. There will be fiscal compensations for lower-income taxpayers affected by public pricing knock-ons from this tax.

The tax will start the process of moving Australia from a high carbon burning, inefficient economy to a more efficient, lower carbon burning economy. It will be replaced by a carbon trading system in three years. (Negotiations have begun for Australia to possibly join the existing European Union carbon trading system).

Wisely, Gillard and Combet are addressing the large raft of climate change policy issues step by step, with the core issue of carbon pricing being tackled first. There will be later separate legislation on compensation for the beleaguered domestic steel industry, and on renewable energy targets and government incentives, where the Greens have more ambitious ideas than Labor.

I sense the Australian electorate is now resigned to the inevitability of this policy reform. The scientific evidence of manmade climate change continues