Monday, July 11, 2011

Australia to tax nation's worst polluters -- but will it work, or hurt?

Australia will force its 500 worst polluters to pay 23 Australian dollars ($25) for every ton of carbon dioxide they emit, with the government promising to compensate households hit with higher power bills under a plan to reduce greenhouse gas emissions unveiled Sunday.

Prime Minister Julia Gillard sought to reassure wary Australians that the deeply unpopular carbon tax will only cause a minority of households to pay more and insisted it is critical to helping the country lower its massive carbon emissions. Australia is one of the world's worst greenhouse gas polluters, due to its heavy reliance on coal for electricity.

"We generate more carbon pollution per head than any other country in the developed world," Gillard told reporters in Canberra as she released details of the tax, which will go into effect on July 1, 2012. "We've got a lot of work to do to hold our place in the race that the world is running."

The government hopes businesses affected by the tax will seek out clean energy alternatives to reduce their bills. The affected companies will have to pay AU$23 per metric ton of carbon, with the price rising 2.5 percent a year until 2015, when the plan will move to a market-based emissions trading scheme. (read more)