UPDATE: So it’s official. There’s going to be a price on carbon (colloquially known as a carbon tax). The Senate has to pass it still but that won’t be an issue with the new Greens senators in place. The package of bills, which includes assistance to the steel industry and low and middle income earners, will become law on July 1 2012. The bills passed in a narrow vote 74-72.
Protestors called the passing a ‘sad day for democracy’ and Ms Gillard said Tony Abbott and the Opposition were on the ‘wrong side of history’.
We’ve got a cheat sheet we wrote at the time of the price announcement which should get you across the basics.
Here’s the original cheat sheet:
Carbon Sunday came and has almost gone and we’ll begin the week with all the details of the Gillard Government’s carbon tax, which they are calling a ‘price on pollution’.
We’ll recap the basics below so you know what’s what, but first let’s get some thoughts from the major players, starting with a concise Prime Minister herself.
Julia Gillard said: “The essence of this could not be simpler. We will require around 500 big polluters to pay a price for the carbon pollution they put into our atmosphere. At the moment they can do that for free. Because something they used to do for free now costs them money they will innovate, they will change, they will find a way to reduce that bill and in doing so will reduce emissions. This plan has been modelled by the same people who modelled the GST. They were right then and they have done the modelling this time around.”
Tony Abbott said: “If this is such a good package, why won’t she [Gillard] take it to an election? Why won’t she take it to an election soon? It’s socialism masquerading as environmentalism. I think this package is going to compound the trust problem which has dogged the Prime Minister ever since she politically assassinated Kevin Rudd.”
Barnaby Joyce said: “The Greens run the Labor party now. This is some biodynamic sensitive new age policy written by a bunch of people who probably wear koala suits. Labor’s own plan says emissions will still go up and they will buy permits overseas. People are going to be poorer, it’s as simple as that.”
So, we announced a carbon tax. But what happened really?
This is the crux of it. Today the Prime Minister announced a price on carbon of $23 per tonne which would be charged on some of the biggest 500 polluters in the country, revised down from an earlier 1000. This price per tonne of carbon dioxide released into the atmosphere will increase by 2.5 per cent each year until the carbon tax becomes an emissions trading scheme on July 1, 2015. What this basically means is that for now, the Government sets a price on pollution. In three years, the market will decide what that price is worth and the Government will simply set a cap on how much pollution our economy is allowed to create.
What’s the aim here?
The carbon tax is supposed to – and only time will tell – cut emissions by 5 per cent by 2020 and by 20 per cent in 2050. It is hoped this will be achieved by the cost incentives to big industry, forcing them to get creative in ways to reduce their impact on emissions released in to the air. These targets are modest. Some would call them pretty small and weak. Many have called them ‘an important first step’ in transitioning to a low carbon economy. Basically, it’s not much but it’s a start.
The scheme will apparently reduce carbon emissions in the air by about 159 million tonnes by 2020. That’s the equivalent of taking 45 million cars off the road, the Government says.
So will everybody be paying a lot more money now?