The Carbon Tax; Burden or Benefit?

On February 24, 2011, the  Australian Federal government announced a framework to implement a Carbon Tax from July 1 2012. It is set to be implemented over 3-5 year period upon which it will switch to a cap and trade 

system.

The price has not been set but various proposals have been discussed in the recent past, such as $23/t and $26/t. The announcement came after an agreement was reached between the Federal Labor government, the Greens and two Independent MPs, and included commitments to ensure all funds collected go back to homes and businesses to assist in the transition to renewables.  This led to accusations that Prime Minister Julia Gillard had breached a pre-election promise not to introduce such a tax. The Leader of the Opposition, Tony Abbott, 

has called for an election over the issue.

To further understand what exactly a carbon tax is; it is implemented by taxing “dirty” energy sources such as burning coal and other forms of fossil fuels. The tax will be based depending on the carbon emission that a 

particular establishment or industrial firm is responsible for.

Carbon Tax may seem a burden for us, and perhaps it will be initially for bigger businesses who are heavy electricity users. But with it the government will be hitting two important targets at the same time.

1. The tax will help decrease Australia’s carbon emissions

2. The money collected has been committed to be used for the further development of green energy within Australia.

Ultimately the aim is to build a sustainable source of clean, green renewable energy, such as solar panels. Australia wide and carbon tax will play a vital role in ensuring that it is economically feasible for that to occur.