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In Australia, carbon tax kicks in

Marketplace Contributor Jul 4, 2012

In Australia, carbon tax kicks in

Marketplace Contributor Jul 4, 2012

Jeff Horwich: In Australia, Aussies are getting used to the first week under a new carbon tax. The country’s biggest polluters are paying a steep $24 per ton of carbon emitted — that’s more than twice the cost of carbon permits in the EU.

Reporter Stuart Cohen is watching the roll-out down under, in Sydney. Hello, Stuart.

Stuart Cohen: Hello Jeff.

Horwich: So we’re a few days in now with this — has there been any immediate effect of the carbon tax?

Cohen: Well, many businesses around the country are already raising prices as a result, and that’s before anybody’s even paid a penny of the tax. The tax itself is only targeted at the 350 or so most polluting companies. But that includes utilities, transportation, and even some local governments with big, greenhouse gas-emitting landfills. Australia’s actually the largest per capita carbon polluter in the world because of their heavy reliance on coal-fired power plants.

A lot of smaller businesses are raising prices ahead of what they expect will be a rise in electricity costs, delivery costs and even local water and sewer rates.

But, on the flip side, much of the money raised by the tax is going to the public to compensate for those higher prices. Many businesses and families are saying now that the tax is a reality, they’re going to start switching to more energy-efficient technologies to save money, which is what the ultimate goal of taxing carbon pollution is all about.

Horwich: What does the Australian public think of the tax, by and large?

Cohen: Well, the reaction’s not been good so far. A new poll just out showed that two-thirds of Australians are actually opposed to the tax. Now, a lot of people believe that that’s simply because the opposition has done a much better job of selling a doom and gloom message that the tax is going to kill the country’s economic growth.

Many people still don’t think that Australia’s efforts are going to have much of an impact globally as long as the world’s biggest polluters, the U.S. and China, still have no plan to cut their carbon emissions.

Horwich: Well if the public is not crazy about it, how confident can we be that the carbon tax is here to stay?

Cohen: The government insists that once the real costs and benefits of the carbon tax start becoming clear over the next few months, a lot more of the public is going to get behind this. The ironic part is that the future of the tax is really very much in doubt — the conservative opposition party in Parliament is promising to scrap it if they come to power in the next election. And recent polls show they’re likely to win it in a landslide.

Horwich: Stuart Cohen in Sydney, thanks very much.

Cohen: You’re welcome, Jeff.

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