Repeal of Australian Carbon Tax soon under Abbott

The process to repeal Australia’s carbon tax formally began this week, when the country’s new Parliament began its session. Prime Minister Tony Abbott, who was elected in a landslide election in September, has called the repeal of the controversial measure one of his top policy priorities, making it the first bill to be introduced in this legislative session.

The carbon tax was passed two years ago during the government of then-Prime Minister Julia Gillard as part of the Clean Energy Act. Under the scheme, which targets Australia’s largest emitters, carbon prices were initially fixed at A$23 (€16.43) per metric tonne during their first year, rising annually at a rate of 2.5 percent. Should the tax remain in place, it is scheduled to switch to a floating price emissions trading system (ETS) in 2015.

Australia is one of the world’s largest per capita emitters, with most of the country’s electricity needs being met by coal - also a major export. The tax, proponents say, would help meet the dual goals of becoming more reliant on gas and renewable energy, while funding investment into cleaner energy sources.

Opponents say that the measure has placed a financial burden on both Australian businesses and consumers, with some figures being cited by Abbott’s coalition placing the increase in household energy bills at A$550 a year.

Abbott has pledged to introduce instead a “Direct Action Plan” to take the tax’s place. The plan would, among other things, focus mainly on soil carbon, and will involve the establishment of an emissions reduction fund. Critics have warned that the funding being allocated for the Abbott scheme may not be enough to meet the goal of cutting emissions by five percent by 2020.