Australia Passes Legislation To Make Its Economy More Sustainable

The Australian Senate yesterday passed a landmark law which makes it the first major economy to put a tax on carbon. The Wall Street Journal said Prime Minister Julia Gillard described the legislation passed as ‘historic.’ She added she hopes it will create an incentive for companies to trade carbon credits and reduce their emissions.

Australia is one of the world’s biggest carbon emitters per capita in the world, since most of its energy comes from coal. Taxing carbon will help the country to make its energy mix more sustainable for providing incentives to carbon-emitting companies to switch to alternative energy alternatives. Besides, it will help the country meet its goal to reduce its emissions five per cent below 2000 levels by 2020 and 80 per cent by 2050.

According to Sustainable Business, the tax will affect 500 of the country’s major polluters. It will come into effect in 2012 and will cost $25 per ton. After that, the country will follow with a carbon trading program that will be launched in 2015, whereby polluters can buy carbon offsets from projects abroad. It is expected the carbon market in Australia will reach $15.5 billion by 2015.

“Introducing a carbon price is but a first step towards tackling Australia’s carbon emissions and securing a healthy planet. While we can all stand proud today of what we have achieved in the milestone of an Australian carbon price and the significant investment in renewables that will follow, there is still much more to do to make Australia a place we would want to leave to our kids” said Dae Levine, Head of Communications for Greenpeace’s Australian chapter.

The organization added that the Australian Government now needs to ensure that its existing policies and future ambitions are consistent with the approach of reducing emissions. “We urge the Government to take two immediate logical next steps. Firstly, withdraw the $100 million grant awarded by the Howard Government to a new dirty coal-fired power station, HRL, in Victoria. And second, eliminate approximately $12 billion worth of subsidies that are provided to the fossil fuel industry every year. Both the money for the HRL grant and these subsidies should be immediately re-directed to safe clean industries of the future,” Ms. Levine added.

The bill creates an A$10bn (US$10.19bn) independent Clean Energy Finance Corporation (CEFC) to encourage private investment in renewable energy, and a A$3.2bn (US$3.26bn) Australian Renewable Energy Agency. CEFC will start in 2013 and will last five years. Half of the money will be invested in energy efficiency and other half in renewable energy.

Companies researching clean energy technologies will get help from the Australian Renewable Energy Agency to help them reach commercial scale.

Image credit: Perth Now