Carbon Tax

Perhaps one of the most controversial issues in Australian politics at the moment is the Carbon tax, due to come into force in July.  Technically however it is not a carbon tax but an Emissions Trading Scheme.  The big difference being that a carbon tax is a straight forward levy where companies are charged by the government based on the amount of pollution they produce, an ETS is slightly more complicated.  With the ETS certain 'green' companies will be awarded carbon credits which they can sell to polluting companies to offset the carbon they produce,  these credits will start off at a fixed rate but by 2015 they will be flexible and change with the current market.  Despite this most people still just refer to it as a carbon tax, partly because it is easier to understand and partly because it is a good way for Tony Abbot to attack Julia Gillard and call her a liar after she promised there would be no carbon tax under her government.  Not that politicians ever need an excuse to call each other liars.

The long and short of it is, that from the 1st of July the top 500 polluting companies in Australia will now be charged $23 per tonne of carbon dioxide they produce, and this cost will inevitably be passed on to us, the consumers.  Ironically enough, one of the largest carbon dioxide producing fuels, petrol, is exempt from the carbon tax (which is a relief having just bought a new car).  So how does everyone paying more money to the government actually help the environment?  The theory is that less polluting products will be able to out compete more polluting products thus pushing demand for more environmentally friendly ways of manufacturing, in reality however I expect a lot of companies will just see it as an excuse to inflate their prices to increase their profit margins.

However you look at it, the carbon tax is bound to be the final nail in the coffin of Julia Gillard's government, what with the shambolic leadership battle earlier this year, the public faith in the current government is at an all time low, demonstrated by the recent Queensland elections.  But what of the alternative?  Tony Abbot? I shudder to think what will happen then.  Still there is no point in me getting too worked up about Australian politics as I am not an Australian citizen and I cannot vote in any elections anyway.