Emissions taxing and trading in Australia

After many years of proposals, counter-proposals, coups and general disappointment the Australian Government has announced its scheme to allow the economic impact of carbon pollution to be managed by the free market.

I’m really really proud that as a country we’ve reached the point where there’s a plan in place. It’s taken longer than it should have. In 2007 it was a policy of both major parties yet for a while more recently it had been a policy of neither. We’re one of the first countries in the world to pull this off.

The plan announced by Julia Gillard sets an initial price of AUD $23 per ton of CO2 produced, along with subsidies for many industries and tax cuts to low and middle income Australians. A few heavily polluting industries will take a hit, but that’s the idea. Businesses that aren’t pollution-centric seem to largely support the scheme.

There will be a transition in 2015 to a free market emission trading scheme. Amusingly Tony Abbot. leader of the conservative, supposedly free market Liberal Party opposes the idea of allowing markets to determine prices. There’s been some shrill, populist freak-out over new taxes, but the impact is likely to be small enough peoples’ lives that it won’t be an issue at the next election. I’m expecting the bursting housing bubble will be more of a worry.