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IN FEBRUARY 2011, Prime Minister
Julia Gillard announced that her
government would implement a carbon
tax sometime between now and July
2012. Since this announcement there
has been a frenzy of debate in both
the political and media arenas. We
have heard the arguments for and
against the tax, but do we actually
know anything about it?
If you would like a simple explanation of
how the proposed tax might work and
what it will mean for you, you may find
Setting the scene...
The science of climate change shows
that human-caused emissions of
carbon dioxide and other greenhouse
gases have had a warming effect on
our planet. This global warming has led
to climate change. Changes in climate
have damaged many ecosystems and
are responsible for an increase in the
severity of natural disasters, which claim
many human lives.
Acknowledging the responsibility of
humanity to address this problem,
nations all over the world have
committed to reducing their carbon
dioxide and greenhouse emissions.
Why a tax?
So it is clear that Australia, like
all other nations, needs to reduce
its emissions, and it has made
legally-binding commitments to do so.
But you may be wondering why it has
to be done through a tax mechanism.
Unfortunately the industries that
have historically contributed most
to our prosperity are also those
that produce the most greenhouse
A tax on carbon dioxide emissions gives
our economy a means by which to slowly
move from being one that relies on
emissions-intensive activities to one
that is sustainable. Rather than
seeing a healthy economy and a
healthy environment as being mutually
exclusive, a carbon tax balances the
needs of both.
How will it work?
Many details of the tax are yet to be
announced, as it is still in the planning
process. The basics, however, are
clear. The government will create a
tax that places a set price per tonne
on carbon dioxide emissions. Those
industries that are liable will need to pay
the government this set price for every
tonne they emit.
Forcing industries to pay for their
pollution will provide an incentive for
them to increase efficiency, reduce
reliance on emissions-intensive activities,
and move towards energy created from
The revenue generated by putting a
price on pollution will be used by the
government to fund renewable energy
projects. Money will also be directed
towards rebates for everyday consumers
and small business owners who will
inevitably take up some of the costs
passed on by big business.
Tax vs Cap and Trade
Creating a carbon tax and
establishing a market-based "cap
and trade" system are two different
strategies used by governments to
lower emissions. A tax fixes a price
on emissions but does not restrict the
number of emissions created, while
a cap and trade system sets a
cap on how many emissions can
be produced but lets the market
trade and determine the price of
Both are valid ways of reducing
emissions, and both will be
implemented in Australia in the next
decade. The proposed carbon tax will
operate for three to five years, allowing
industries to adjust to paying for their
pollution, before a more complex cap
and trade emissions trading scheme
replaces it. It may sound complicated,
but the bigger picture is that Australian
industries will be paying a financial price
for their pollution. For those who have
already experienced the physical price of
pollution and climate change -- through
droughts, storms and floods -- this is a
Please visit www.clrinsw.org
Should we support the carbon tax?
One of the big arguments that has
been made against a carbon tax is that
it will raise living costs for everyday
Australians, who may already be doing
This is true, living costs will inevitably
rise as industries pass on some of their
costs to consumers.
Given the fear surrounding these rising
costs. many are wondering "why should
I support this tax?"
We need not look beyond our daily lives
for the answer. It is the same reason we
work long hours or put our hard-earned
cash into the mortgage or school fees -
for the good of our loved ones.
We carry out selfless acts each day
in order to secure a happy future for
those we care about most. By reducing
our carbon emissions, we are not only
working towards a better future for
our children, but for people all over
Rather than seeing a carbon tax as
an added burden to daily life, we
must approach it in the same way
as we approach a charity collection
or a spontaneous donation - with a
A financial sacrifice now amounts to an
extraordinary gift for future generations.
If there is a change to be made to our
weekly budgets, then what better reason
to make it?
Tell me more about
Michael Fennell-Fraser tidying up at St Kevin s.
Year 5 students at St Kevin s Primary Cardiff are ready to
take care of their local environment
The leaders of religious congregations in NSW offer a
view on the much vaunted Carbon Tax.
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