Tuesday, July 3, 2012

Australians brace for carbon tax impacts

Australia Prime Minister Julia Gillard hailed the move to bring in a carbon tax in a bid to tackle climate change. The tax on corporate pollution will force about 350 major polluters to pay A$23 (RM81.00) for every tonne of carbon emissions they produce.

Video grab from 7NewsPower plant is one of the top industrial polluters that will be hit hard by the Carbon Tax implementation

    File picture by voanews.com. Australians are not happy with the introduction of carbon tax.

What is Carbon tax?

It's a tax on the carbon content of fuels or, in effect, a tax on the carbon dioxide emissions from burning fossil fuels. It levies a fee on the use of fossil fuels based on how much carbon their combustion emits. Sometime people call it pollution tax.

Australia did it on July 1

Many large users of carbon resources in electricity generation are resisting carbon taxation. Some notable examples are the United States, Russia, China and Japan.

PM Julia Gillard said that Australia has been debating on putting price on carbon and tackling climate change now for many long years. With the scheme, it is hoped that by 2020, Australia's carbon polution will be lesser by 159 million tonnes per year than it would be otherwise. This is equivalent to taking 45 million cars off the road.

Fixed carbon tax is for the first 3 years, followed by market-based carbon trading scheme after that.

Certain parliamentarian claimed that this 'flawed' policy will rake in $36 billion for the government over four years, and many small business as well as families are dreading its implications. Many believe that the cost of living will soar and it will hurt the industry.

Will we (Malaysians) be affected?

One of the industries that is bracing for the carbon tax implications is cattle production.

Beef Central Australia claimed that direct on-costs for producers will include a widely anticipated 9-10c/litre increase in the cost of aviation fuel, which affects the many larger-scale operations that reply upon helicopter and fixed wing-aircraft for mustering and property management.

We import large amount of cattle products from Australia as well as New Zealand, as such, we could perhaps also be on the receiving end.

Are we paying Carbon tax too?

Indirectly, yes.

Under the Renewable Energy Act 2011, there are four clean energy sources that are entitled to the FIT program, namely Biomass, Solar PV, Small Hydro and Biogas. Energy produced from these clean sources are paid premium rates and is funded by the 1% levy on consumers consuming 350kWh of electricity and above.

What this means is that the more energy you use -  which is primarily generated from fossil fuels - the more fees (or tax, if you like) will be levied on you. This is almost the description of Carbon Tax.

So, yes, in a way we are paying tax for similar purpose.

No comments: