Posted By Jeff Moad, July 12, 2011 at 11:04 AM, in Category: Sustainability
While political support for carbon dioxide emission cap-and-trade legislation has all but disappeared in the US, Australia this week moved aggressively toward putting market prices on emissions with a proposed climate change package that would begin taxing large carbon producers next July and would introduce market-based emission permit trading in four years.
An important piece of the climate change package introduced this week by Australian Prime Minister Julia Gillard is the creation of a Clean Energy Finance Corporation that would be financed in part by carbon emission taxes and would invest $10 billion over the next five years in companies developing renewable energy, low-emission technologies, and energy-efficiency technologies.
Gillard reportedly already has secured enough support in Parliament to pass the legislation by the end of the year.
The proposed legislation would set an initial price on carbon dioxide emissions of $24 per ton beginning in July of 2012. The program would affect plants and other facilities producing more than 25,000 tons of greenhouse gases per year. The initial fixed rate would rise 2.5% in mid-2012 and another 2.5% in mid-2014, with a floating market price kicking in in mid-2015. The law would set floor and ceiling prices for the first two years of market trading of carbon emission permits. Australian companies would be able to purchase a combination of international and domestic credits to offset their emission liabilities.
The Australian government has estimated that the carbon emission pricing legislation will help spur $20 billion worth of investments in renewable energy projects in Australia over the next decade, and $100 billion of investments by 2050.
Political and indusgrial opposition to the plan has emerged, but Gillard's government has responded by offering to offset emission tax costs for some vulnerable industries such as steel manufacturing and by offering income tax cuts.
Do you think the Australians are on the right track with their climate change package? Or will the legislation, as some critics claim, prove to be an inefficient way to cut emissions and an undue tax burden on manufacturers?
Written by Jeff Moad
Jeff Moad is Research Director and Executive Editor with the Manufacturing Leadership Community. He also directs the Manufacturing Leadership Awards Program. Follow our LinkedIn Groups: Manufacturing Leadership Council and Manufacturing Leadership Summit