Australia’s “Clean Energy” Future

Nothing in Australian politics has caused so much controversy since the introduction of the Goods and Services Tax (GST) in 2000. What is it? The recent announcement of a blueprint for carbon tax by Prime Minister Julia Gillard. Although the tax will not become effective until July 2012, the opposition and big industry are already out in force convincing ordinary people of the supposedly devastating impact on jobs, industry and household budgets. But what are the real implications, both on industry and families? And is Australia leading the way to a “Clean Energy Future?”

Firstly it should be acknowledged that the carbon tax is not new. Finland was the first country to introduce a carbon tax in 1990, and Sweden soon followed. Germany enacted an “ecological tax reform” in 1999 and the UK a “climate change levy” in 2001. In Australia, the Carbon tax will involve the pricing of carbon emissions by industry at $23 per kilogram, as an incentive to switch to cleaner energy alternatives. The Renewable Energy Target will ensure that one fifth of Australia’s electricity comes from renewable sources. For the first three years the carbon tax will remain at a fixed price, before transitioning to an emissions trading scheme in 2015.

Admittedly, some jobs in the coal and mining industries will be lost, and big industries are predicted to pass on the extra cost to consumers wherever possible, leading to an expected rise in living costs. In order to compensate, the government will channel more than half of carbon pricing revenue directly onto families through tax cuts or increased family payments, while the rest will be used to support jobs in the most affected industries. Furthermore, the tax is being introduced alongside legislation for a “Clean Energy Future,” signifying the start of a boom in renewable energy jobs. A massive $10 billion will be poured into a new, independent Clean Energy Finance Corporation, which aims to attract private investment in green projects. This will support the transformation of existing manufacturing businesses through the development of renewable energy (such as solar, wind and geothermal power) and highly-efficient, low-emissions technologies. Run by a panel of independent experts, the new Australian Renewable Energy Agency will also receive $3.2 billion to support the development of renewable energy technologies.

Why the announcement of the carbon tax has been met with such resistance, however, I find hard to understand. Australians openly acknowledge they care about the environment, while climate change skeptics are few and far between. We have the highest per capita carbon dioxide emissions in the world among developed countries, and it is about time we started taking more responsibility in curbing climate change. Being “green” is no longer just for hippies, and over recent years there have been a variety of government initiatives to help households reduce their impact on the environment that have been well received by the public, such as subsidies on the installation on solar hot water panels and energy monitors. When it appears to affect our back pockets, however, it seems that ordinary Australians suddenly re-evaluate their priorities (and, as current polls would suggest, their political allegiances!).

Only time will tell how effective the economics of the carbon emissions trading scheme truly is in forcing big polluters to clean up their act. Hopefully, Australia’s carbon tax will be just as successful as Germany’s, which has so far proven effective in reducing energy consumption, increasing jobs, and spurring innovation, while having minimal impact on growth and innovation. Above all, however, we must remember that the carbon tax is not the only pathway towards a “Clean Energy” future, and that the biggest responsibility still lies with ourselves in the choices we make on a daily basis, such as choosing to ride a bike to work rather than drive, buying locally grown produce, or the adage of “reduce, reuse, recycle.” Personally, though, as a mother of two, I’m excited that Australia’s politicians are finally walking the talk in aiming for a cleaner, greener future for our children.

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