The Gillard government’s recently released Carbon Tax scheme highlights Labor’s desire to shift to renewable energy sources. This desire being emphasised in a Prime Ministerial press conference on 10th July, where Prime Minister Julia Gillard stated,
“The science is clear – our planet is warming…caused by carbon pollution, by human activity, and we need to cut carbon pollution”.
The Gillard government has set a price on carbon emissions at AUD$23 a tonne, with increases of 5% a year before moving to a market dictated price in three years.
Through the carbon tax the government aims to cut carbon emissions by 5% in 2020 and 80% by 2050. Prime Minister Gillard stated, “This all adds up to a reduction in carbon pollution of 160 million tonnes by 2020…the equivalent of taking 45 million cars off the road”.
Under this scheme $10 billion will be spent on green power initiatives over a five year period, with the Federal Government planning to source 20% of electricity from renewable energy sources by 2020.
All great news for the CleanTech sector.
The Minister for Climate Change, Greg Combet, reiterated that a carbon price means that those carbon-emitting businesses will pay a price for each tonne of carbon pollution that they release into the atmosphere, creating an incentive for businesses to cut their pollution and to look for alternative innovative sources of energy.
Federal Minister Chris Evans also highlighted that as a result of this Carbon Tax he expects to see an increase in investment in renewable energy sources.
“We’ve got enormous potential in solar and wind and wave which has been largely untapped and the impact of the carbon price will make them more competitive”, furthermore he highlights that companies will be searching for alternative energy sources which will lead to investment in areas which are necessary to change out energy sources.
In Western Australia, Premier Colin Barnett was concerned that his state would be hit hard by the tax and emphasised concerns for Australia’s manufacturing industry as he implied that some businesses will close down rather than trying to become more energy efficient.
Commenting on the Federal Government’s Carbon Tax scheme, OneSteel’s Managing Director and Chief executive Officer, Mr Geoff Plummer reiterated concerns with the proposed carbon tax and its likely implications on the industry’s competitive position.
“Steelmaking technology constraints mean there is little the industry can do to materially reduce emissions from its key manufacturing processes. This means that rather than act as a price signal to reduce emissions, the tax as originally announced would merely have been an additional cost burden not faced by our international competition”.
However, Mr. Plummer’s views were tempered by the Steel Transformation Plan which allocates $300M to help the steel industry transform and a 94.5% offset of their carbon costs when the scheme starts – now that’s a political solution for you!
The Clean Energy Council, not surprisingly welcomed the Carbon Tax initiative, as Clean Energy Council Director of Strategy Kane Thornton reinforced how the Carbon Tax would “turbo-charge the clean energy sector”.
“It will create $100 billion in investment to 2050, creating new jobs for future generations…the carbon price scheme proposed should give renewable energy companies and investors the long term certainty that investment in clean energy is an investment in the future. It will support the accelerated roll out of proven clean energy technologies like solar power, wind power and bioenergy while also allowing Australia to develop new technologies like geothermal, ocean and large scale solar”.
Thornton reiterated that the new initiatives announced will “deliver action on carbon pollution and transition Australia to a clean energy future”, furthermore he suggested that a legislated carbon price would assist to “give the whole power industry the stability require to invest in new generation assets for the future”.
It is without doubt a great bonus to the whole clean technology sector in Australia – for now, as on the other side of politics, the Liberal opposition leader Tony Abbot, who has promised to rescind the tax takes the view that, “The Labor-Green carbon tax will drive up prices, threaten jobs and do nothing for the environment”. Additionally, Abbot emphasised the imposed heavy cost on Australian industries that their overseas competitors will not face as well as Australian jobs being sent offshore for no environmental gain.
“It will push up the price of electricity, gas, transport and food. Airfares will increase because the tax applied to aviation fuels…When Julia Gillard talks about a ‘clean energy future’ what she really means is higher electricity bills and fewer jobs with no environmental benefit”.
For the average ‘Aussie’ on the street and the talk back radio caller, the issue of human induced climate change and the need to be doing something about it has been lost in the admittedly ‘dummed down’ political message which revolves around the following key points.
Firstly, there is that one other somewhat related political and ethical issue of the Prime Minister going on the record before the last election to confirm that there would be “no carbon tax” in her Government. Now, for the average voter an obvious lie is much easier to understand than the nuances of cap and trade, ETS’s and carbon taxes, so we’ll grab a hold of that.
Even if, as agreed by most economic commentators and technologists like me, a Carbon Tax is viewed as the most efficient mechanism to change human behaviour and reduce carbon dioxide emissions – why is Australia at the front of the pack?
In real terms the Aussie Carbon Tax it will make a negligible difference to the global environment but potentially a significant short term impact on the Australian economy – good mechanism, wrong country and wrong time? I sincerely hope not as Australia has the potential to be the “Saudi Arabia of Renewables”, but following an election at some stage in the next couple of years, this great carbon tax experiment may become a big ‘kangaroo hop’ backwards.
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