What’s the carbon pollution reduction target?
The target is to cut carbon pollution by at least 5 per cent compared with 2000 levels by 2020. Doesn’t sound like much? In real terms, this means cutting net expected pollution by at least 23 per cent in 2020 which means cutting 160 million tonnes of pollution (equivalent to emissions from 45 million cars) from the atmosphere every year until the end of the decade.
Will this cost me more?
It’s true that some of the costs paid by polluters will be passed through to the prices of the goods you buy. It’s also true that over half of the money raised from having a price on carbon will be used to fund tax cuts, pension increases and higher family payments. The remaining money will be invested to support jobs and help to build Australia’s clean energy future. Brands that are genuinely doing better will now stand a chance, and being more economically viable may allow them to drop prices.
How will having a price on carbon cut emissions?
Despite having strict corporate laws and regulations around water and solid waste pollution that have been in place since the 1970s, releasing carbon pollution is still free and unregulated in Australia so currently there is no incentive for major polluters to reduce emissions.
A carbon price changes this. It puts a price on the carbon pollution that Australia’s largest polluters produce. A price on carbon pollution creates a powerful incentive to businesses to cut their pollution either by investing in clean technology or finding more efficient ways of operating.
How does it work?
For the period 2012-2015, there will be a fixed price starting at $23 per tonne. This price will rise by 2.5% each year, in real terms. Facilities that have direct (ie. Scope 1 – CO2-e produced on-site) greenhouse gas emissions of 25,000 tonnes of CO2-e a year or more will be expected to pay the tax. Liable businesses will be required to buy and surrender to the Government a permit for every tonne of emissions they produce. After 2015, the Carbon Tax will morph into an Emissions Trading Scheme (ETS), whereby permits will be tradable between organisations so the price per tonne of CO2-e will be set by the market (subject to a floor and ceiling price). An ETS enables set target emission reductions. Under the plan for a clean energy future, Australia will cut 159 million tonnes a year of carbon emissions by 2020.
Will it actually work?
The experts agree – money talks. Economic experts around the world (including the Organisation for Economic Cooperation and Development and the Productivity Commission) recognise that putting a price on carbon is the most environmentally effective and cheapest way to cut pollution. A carbon price will encourage businesses across all industries to find the cheapest and most effective way of reducing carbon pollution.
For more information on the Australian Government’s report visit ‘What a carbon price means to you: A pathway to a clean energy future’