At 12 noon on Sunday 10th July the Australian Federal Government announced the details of their Carbon Tax. This is a truly momentous occasion as it finally marks the start of a serious program to reduce Australia’s green house gas emissions.
The Gillard Government is to be commended for having the courage to begin this process.
There are 4 main pillars to the package:
1 Price on Carbon
2 Energy Efficiency
3 Renewable Energy support
4 Land use measures
The carbon tax is to be the precursor to an emissions trading system:-
Targets to be 5% by 2020 and 80% by 2050 (up from 60%)
Only 4 of the Kyoto gases included (CO2, Methane, NO, perflurocarbons)
Climate Change Authority to advise Government on what targets and caps to enforce.
Start date of 1 July 2012.
Initial price set at $23/t and rising by 2.5% per year for 3 years.
500 of the worst emitters in Australia will be covered (around 70 of these are land fill sites).
Price projected to be around $25 internationally by July 2015 (when we go to trading system).
Trading to be linked to international market from July 2015 (i.e. international permits can be used).
Carbon Farming Initiative — carbon capture to be included (e.g. biochar).
50% of the revenue to go to compensation for households ($9 billion)
tax cuts for all on less than $80,000 (by increase in tax free threshold from $6,000 to $18,200).
e.g. income of $25,000 will receive a tax cut of $503.
more tax cuts to be delivered in 2015-2016.
assistance will be reviewed closer to 2015 to see if more assistance is needed.
$1.7 billion to cover biodiversity, carbon farming, indigenous assistance.
free permits for worst exposed industries (94.5% free).
50% free permits for the LNG industry.
Govt to buy by tender up to 2000MW of the worst emitting coal fired electricity power (e.g. Hazlewood has 1600MW).
total of $9.2 billion for trade exposed industries.
the $9.2b includes $1.3b for a coal jobs protection plan and $0.3b for a steel transition plan.
Overall figures for the tax/trading system:-
Initial extra cost to the budget of $2.9 billion in 2011-2012 (part of the total $4.3 extra cost in first 4 years).
$8 billion/yr revenue expected to be collected.
Nice quote from Julia Gillard:
“The CPRS ran into a brick wall. I’ve knocked the brick wall down… bang, its going through.”
More details are available at new site:- http://www.cleanenergyfuture.gov.au/