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Australia Becomes First Developed Nation to Repeal Carbon Tax


Business  (tags: money, tax, carbon tax, Australia, business, corruption, environment, climate change, politics, economy, energy, government )

Michael
- 1770 days ago - online.wsj.com
CANBERRA, Australia--After almost a decade of heated political debate, Australia has become the world's first developed nation to repeal carbon laws that put a price on greenhouse-gas emissions.



   

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Michael O (176)
Saturday July 19, 2014, 12:07 pm
In a vote that could highlight the difficulty in implementing additional measures to reduce carbon emissions ahead of global climate talks next year in Paris, Australia's Senate on Thursday voted 39-32 to repeal a politically divisive carbon emissions price that contributed to the fall from power of three Australian leaders since it was first suggested in 2007.

Australia, the world's 12th largest economy, is one of the world's largest per capita greenhouse gas emitters due to its reliance on coal-burning power stations to power homes and industry. In 2011, daily emissions per head amounted to 49.3 kilograms (108 pounds), almost four times higher than the global average of 12.8 kilograms, and slightly ahead of the U.S. figure of 48.2 kilograms.

The former Labor government, while introducing a price on carbon, said the move would help slash emissions by 160 million metric tons by 2020. It offered voters billions of dollars in compensation through tax breaks and welfare payments for increased costs stemming from one of the most dramatic reforms ever attempted in the energy-reliant economy.

But after the global financial crisis took hold in 2008, followed by the end of a decadelong mining boom in 2012 that slowed growth and employment in the A$1.5 trillion (US$1.4 trillion) economy, Australian voters turned against climate lawsórecognized by the International Energy Agency as model legislation for developed countriesóblaming them for rising energy bills and living costs.

The World Bank in May produced a State and Trends of Carbon Pricing report counting carbon pricing programs in 40 nations and 20 regions worth a collective US$30 billion, while also singling out repeal plans in Australia as one of the biggest international threats to the rollout of similar programs elsewhere, given its example.

Prime Minister Tony Abbott, who made a pre-election "pledge in blood" to voters and business to prioritize growth above climate shift, delivered on his promise after independent senators with deciding votes in the upper house sided with his conservatives, following a power shift this month that ended years of domination by the pro-environment Greens party.

"Today the tax that you voted to get rid of is finally gone, a useless destructive tax which damaged jobs, which hurt families' cost of living and which didn't actually help the environment is finally gone," a jubilant Mr. Abbott told voters in a news conference after the Senate's decision.

He said the carbon price was acting as a A$9 billion a year handbrake on the economy, which was adjusting to the end of a record mining investment boom that helped shield Australia through much of the recent global economic downturn.

Without matching emissions policies in other industrialized countries, Mr. Abbott had said earlier the tax was an unfair shackle on local companies and individuals, unequaled except in Europe, where an emissions market has operated since 2005.

Labor and Green opponents of the government said the repeal would make the country an international "pariah" on efforts to combat climate change.

"This is a fundamental moment in Australia's history. We are about to devastate the future of this country," said Labor Senator Lisa Singh in an impassioned speech warning the government that climate warming would impact most on future generations.

The carbon tax and plans for an eventual emissions market dominated Australian politics for years, gaining momentum in 2007, when former Labor Prime Minister Kevin Rudd called climate change "the greatest moral challenge of our time" and made signature of the Kyoto climate protocol one of his first political acts after winning power. Mr. Abbott defeated Mr. Ruddóthen in his second stint as prime ministeró10 months ago, in an election fought largely over the carbon price and its impact on energy costs.

The carbon tax has affected industries ranging from mining and energy to aviation, and was widely opposed by manufacturers and a majority of business representative groups including the country's main chamber of commerce.

David Byers, chief executive of the Australian Petroleum Production & Exploration Association, an industry group, said: "Today's repeal of the carbon pricing mechanism is significant as it removes a cost facing Australian LNG (liquefied natural gas) exporters competing in global markets; one that does not exist for our international competitors."

While BHP Billiton Ltd., the world's largest miner, said its management believed in having a price signal on carbon, the company has argued the current system wasn't competitive internationally.

"We have been very clear that we are strong supporters of both the repeal of the carbon tax and the mining tax," BHP Billiton Ltd. Chief Executive Andrew Mackenzie said in an interview. He said repealing the "misdesigned" carbon tax would be very important in increasing Australia's competitiveness at a time when companies selling exports have faced challenges including a historically high Australian currency.

J.P. Morgan last year estimated the removal of the carbon tax, together with the repeal of the government's mining levy, would boost its valuation on companies such as BHP and Rio Tinto PLC by as much as 6%.

Energy provider AGL Energy Ltd. said the repeal would hurt earnings in the near term because transitional payments meant to help it cope with the impact of the carbon price on some of its coal-fired plants would cease, knocking A$186 million off its earnings before interest and tax.

But in a release to Australia's stock exchange Thursday morning, AGL said that in the long term, the repeal would have a "materially positive impact," along with associated measures still under consideration by the government to weaken a long-standing target for 20% of Australia's electricity needs to come from renewable sources by 2020, boosting coal-fired power.

Airline operators also said they had been hurt badly by the tax, at a time when intensifying competition in Australia's domestic travel market was already driving down ticket prices. Virgin Australia Holdings Ltd. said it lost A$27 million in the six months through December 2013 due to the carbon tax, saying it couldn't pass costs on to passengers because of stiff market competition. It reported a first-half loss of A$83.7 million.
 

David C (75)
Saturday July 19, 2014, 12:26 pm
a little extra wealth now. a little more quickly will come the poisoning.
 

Past Member (0)
Sunday July 20, 2014, 5:10 am
Perhaps punishment is the way to give people a lesson
 

Lynne Buckley (0)
Sunday July 20, 2014, 11:24 am
Very disappointing
 

Roger G (148)
Sunday July 20, 2014, 1:11 pm
yep the mad monk got his wish, but he will follow the fate of the LNP member for Stafford !
see:
http://www.brisbanetimes.com.au/queensland/labor-wins-20-swing-in-stafford-byelection-20140719-zuvom.html
 

Les M (3)
Sunday July 20, 2014, 2:54 pm
People need to realize how this may have long lasting effects for the world.
 

Birgit W (160)
Sunday July 20, 2014, 3:17 pm
This makes no sense to me. Thanks for sharing Michael.
 

Lona Goudswaard (66)
Sunday July 20, 2014, 5:45 pm
That's what voting in a right wing government will do to a nation. The country is now run by the mining industry, which has only one interest at heart and that is how they can maximise their short term capital gain. Besides turning back any measures intended to reduce CO2 emissions the government is determined to further destroy the environment by digging out a harbour through the Great Barrier Reef to open it up for coal transporting tankers to China.
There's no limit to how much this government is prepared to ruin to keep their bosses happy. And by the time the Aussies find out that none of the wealth is coming their way but remains with their 1%, the promises made by Tony the Mad Monk of a A$500 lower energy bill were just a electoral lure and his "climate change was not the only or even the most important problem that the world faces" another lie, it'll be too late.
 

Katie & Bill D (107)
Sunday July 20, 2014, 6:45 pm
Thank You
 

Eternal Gardener (734)
Sunday July 20, 2014, 7:44 pm
Lets hope so Roger!
 

MmAway M (519)
Sunday July 20, 2014, 10:47 pm
Noted and TU for posting! Trying to note all of your news before I Hide! Sleepy! Good....Never enough stars for YOU!
 

MmAway M (519)
Sunday July 20, 2014, 10:51 pm
Stars to most! Your news is truly amazing! Thank you for posting, could not get this one away from wireless, but will keep.
 

Debra G (0)
Sunday July 20, 2014, 11:17 pm
"At international climate talks last year in Warsaw, Japan, Canada and Australia were standouts in going backward..." Well, who really wants to breathe anyway? And I was surprised that Saudi Arabia was #1 on the chart of carbon emissions (Australia #2, US #3)
 

Past Member (0)
Monday July 21, 2014, 12:29 am
Noted, thanks!
 

Maria Teresa Schollhorn (42)
Monday July 21, 2014, 12:57 am
Noted. Thank you Michael.
 

Julie W (33)
Monday July 21, 2014, 2:57 am
Many of us are not too pleased about this. Not all Aussies live in the past. Grrr!
 

Robert O (12)
Monday July 21, 2014, 10:13 am
Talk about discouraging and infuriating. Thanks Michael.
 

Lynn Squance (235)
Monday July 21, 2014, 12:16 pm
"At international climate talks last year in Warsaw Japan, Canada and Australia were standouts in going backward, and so steps like this do matter."

It is time to relegate Harper and his harlots to the dustbin of Canadian and world history in 2015.

It seems that conservative governments all over the world are willing to put profits before people. When the air is so toxic, when the rivers run black, what will future generations (if there are any) say about our stewardship of the earth and its resources?

Look at figures for Europe on that graph. Germany is close to being renewable energy reliant for many things. There has been a political will to lead in that direction.

And what will this mean to the Antarctic ice cap? Just as in the Arctic, large chunks of ice etc are thining and then calving. Will this unbridled stupidity put Sydney underwater?

Now we know more but the corporations are still suppressing the science so that they can rake in more money.
Look what is happening in Siberia, Russia. Methane leaks! These leaks pose problems with Arctic ice melt and climate change. Add on to that, volcanic winters if people like American, Taylor Haynes, are elected (candidate for governor of Wyoming). He plans to allow oil and gas drilling in Yellowstone National Park which would be more disastrous than we could ever imagine, Yellowstone is the site of a SUPERVOLCANO

And for those that have not seen this petition, please sign Say No to Drilling in Yellowstone National Park!
 

Lynn Squance (235)
Tuesday July 22, 2014, 2:35 pm
There is also a Forcechange petition Urge Australia Not to Backtrack on Climate Action that needs your signature also.

Thanks
 

Past Member (0)
Saturday July 26, 2014, 5:29 am
Noted.
 

DaleLovesOttawa O (198)
Saturday August 2, 2014, 8:42 pm
An interesting article. Certainly, when one has a right wing government, there is more of a move in the direction of going against the environment and suiting the 'needs' of large corporations.
 

Jennifer H (4)
Tuesday August 12, 2014, 7:46 pm
It is sad to see more and more politics in Australia moving against the environment. Unfortunately it seems to be following the USs example. Putting corporations ahead of people, environment and wildlife.
 
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