The Australian Senate has approved a landmark tax on polluters with the passing of an emissions trading program, considered one of the largest economic reforms in years.
The Senate passed all 18 bills of the government’s Clean Energy Act by a vote of 36 to 32 on Tuesday.
The bill will impose a carbon tax on 500 of the nation’s biggest polluters, effective July 1, 2012.
Polluting industries will initially pay $24 per ton of carbon emissions, moving to a flexible price after three years, the government said in a joint statement from Prime Minister Julia Gillard, Treasurer Wayne Swan, and Minister for Climate Change Greg Combet.
Carbon pollution will be cut “by at least 160 million tons a year in 2020—the equivalent to taking 45 million cars off the road,” the statement said.
Agriculture, forestry, and land will be exempt from the tax and households will be compensated for extra costs through tax cuts and increased benefits.
“It is a charge on pollution, not a tax on households or small businesses,” Combet emphasized in the statement.
The controversial act can be viewed as a victory for Australian Prime Minister Julia Gillard, who has struggled to gain ground in the polls since taking over the leadership from former Prime Minister Kevin Rudd in a party coup last year.
The failure to enact a carbon tax was seen as a major contributor to Rudd’s demise as leader.
Gillard described the result as a “major milestone” in Australia’s efforts to cut carbon pollution and said there would be potential employment opportunities arising out of new industries created via the act.
“It’s a win for those who would seek their fortunes and make their way by having jobs in our clean energy sector,” Gillard said at a press conference. “Today we have made history. After all those years of debate and division, our nation has got the job done.”
The opposition, meanwhile, has indicated it will continue the division and promised to repeal the bill if the Conservatives win in the next nationwide elections in 2013.
Federal Opposition leader Tony Abbott, who was out of the country at the time of the Senate vote, issued a statement saying, “Three million households will be worse off” under the carbon tax. “At the next election, I will seek a mandate from the Australian people to repeal this tax,” he noted.
Gillard dismissed the comments saying the opposition had no intention of repealing the act.
“Every living Liberal leader, including the current leader of the opposition, is on the record as supporting a price on carbon,” she said on ABC radio.
The Australian Industry Group (AIG) expressed concern about the impact of the tax on its members at a time of “weak global economic conditions.”
“The passage of the climate change legislation with a high starting price and no flexibility to adjust the price in the initial years is deeply disappointing,” AIG Chief Executive Heather Ridout said in a statement, adding, “It will add significant costs at a time when business can least afford it.”
Greens and Independents
The bill was passed with the help of the Greens Party that holds the majority in the Senate.
Australian Greens deputy leader, Sen. Christine Milne, hailed the passage of the act, saying it was a historic day.
“Today is the day that Australia lays the foundation for a whole economic transformation and it’s the day we start serious action to tackle the climate crisis,” she said in a statement.
Congratulations on the passing of the bill were also received from overseas.
Former U.S. Vice President Al Gore, who has become a prominent climate activist, issued a statement congratulating Australia.
“As the world’s leading coal exporter, there’s no doubt that opposition to this legislation was fierce. But through determination and commitment, the voice of the people of Australia has rung out loud and clear,” he said.
The Australian legislation was a global landmark, he noted saying, “The world has turned a pivotal corner in the collective effort to solve the climate crisis.”
While Australia contributes to around 1.5 percent of the world’s emissions, it is the developed world’s highest emitter per capita in the Organization for Economic Cooperation and Development Review and ranks among the highest in the world, according to the Australian government’s Garnaut Review.
The Clean Energy package has now been passed by both houses of Parliament, scraping through the House of Representatives 74 to 72.
Independent Rob Oakeshott, whose support was critical to the bill’s passage through the Lower House, said job and industry opportunities were powerful aspects of the Clean Energy legislation and Australia would now be in line with global trends, Fairfax News reported.
“More than half of the population of the developed world lives in countries with emissions trading schemes,” he said.
“Our challenge now is to link in with these international markets and get a broader global handshake agreement on emissions trading within the next five years.”
