Australia gets real on carbon emissions

by frog

Big congratulations go out to our Aussie Green cousins for their very successful negotiations with the Gillard govt to introduce a price on carbon! As Australian Greens Leader, Bob Brown said at the press conference, the Greens have already delivered on their biggest election promise.

The Australian carbon price just announced will be introduced on 1 July 2012 starting at A$23 a tonne rising 2.5 per cent a year. It will be paid by around 500 of the biggest polluters and will be replaced by an emissions trading scheme from 1 July 2015.

That’s about NZ$29/ton compared to John Key’s $12.50, and unlike here, the full package of initiatives can be expected to have a meaningful effect on Australian emissions and the transformation of their economy away from fossil fuels.

As Australian Greens Deputy Leader, Christine Milne said Sunday:

With the establishment of an expert Climate Change Authority, the lifting of the 2050 target to 80%, the five year scheme caps updated each and every year from 2015, and a price floor introduced at the same time, I am confident that this package can deliver real, science-based pollution cuts.

The groundbreaking support for renewable energy, energy efficiency and landscape carbon, the contracts for closure of coal fired power plants and the limits on the use of international offsets ensure that pollution cuts which were pushed into the distant future under the government’s original plans will start now.

Indeed, the summary list of key points from the Sydney Morning Herald is impressive:

- Carbon price to start on July 1, 2012 starting at $23 a tonne rising at 2.5 per cent a year.
- It will be paid by around 500 biggest polluters.
- It will be replaced by an emissions trading from July 1, 2015.
- Price ceiling and floor to apply when trading starts.
- There will be two rounds of tax cuts and increases in allowances, payments and benefits.
- The tax free threshold will almost triple to $18,200 from July 1, 2012, and then increase to $19,400 from July 1, 2015.
- Every taxpayer with income below $80,000 to get tax cut from July 1, 2012.
- Costs for the average household will rise by $9.90 a week.
- Average household assistance, under the “clean energy supplement”, will be $10.10 a week.
- $9.2 billion will be allocated over the first three years for industry assistance.
- Most exposed industries such as steel, aluminium, zinc, pulp and paper makers will get free permits representing 94.5 per cent of industry average carbon costs.
- $300 million has set aside help the steel industry move to a clean energy future.
- $1.3 billion has been set aside for a Coal Sector Jobs Package, targeted at mines that are most affected by the carbon price.
- A $10 billion Clean Energy Finance Corporation will be established to invest in new technology.
- $3.2 billion has been allocated to the Australian Renewable Energy Agency.
- Closure of 2000megawatts of dirtiest power generators by 2020
- Agriculture is not subject to carbon price, farmers to benefit from carbon farming.
- Small grants will be made for community-based energy efficiency programs.
- Transport fuel excluded, but heavy transport to start paying carbon tax in 2014.
- Climate Change Authority to advise on pollution caps and meeting emissions targets.

It is almost surreal to imagine an equivalent approach in New Zealand, and that’s unfortunate for more reasons than one. As Co-leader Russel Norman points out, the Aussie carbon price poses a risk to the NZ economy.

If we continue with a weak carbon price, we’ll fall behind Australia economically as their businesses become more carbon efficient under the new scheme,” Dr Norman said.

The support now being offered to clean technology in Australia, both in the carbon price and the $10 billion for clean energy announced today, means we risk losing some of our best and brightest clean technology companies to Australia. Instead, we’d be left with subsidised polluting industries.

We’re already spending about $1 billion a year subsidising carbon pollution, and as the price of carbon goes up, that bill will go up too. We can’t afford to carry polluters while driving away our clean tech entrepreneurs.


The race is on to innovate and move to a low-carbon economy. By setting a higher and firmer price on carbon, Australia will have an edge over New Zealand in the new low-carbon economy.

A higher price on carbon will stimulate thousands of smart green jobs in Australia, while New Zealand will be left behind with an economy choked by greenhouse gases.

The Key govt has long argued that NZ needs to align our emissions reduction schemes with Australia. Of course, they didn’t reckon on there being Greens involved across the ditch to ensure a realistic approach was implemented.

Expect the excuses as to why we can’t match the Aussies to begin flowing any time now.

frog says