Australia does not usually grab headlines during the United Nations Framework Convention on Climate Change (UNFCCC) at the annual Conference of Parties (COP). But instead, Australia is making significant gains in national climate policy.
While some may not be paying much attention since it’s not a China, India or Brazil, the country’s proposed carbon tax, which can be in place as early as July 2012, can act as an important case study for other countries.
Politics and GDP
In general, Australia is very similar to other developed nations on both political and economic fronts. Australia’s parliamentary system is similar to that of the United Kingdom, and its GDP is comparable to Canada’s - ranking 18 and 15 respectively in GDP worldwide. So, if a carbon tax is imposed, similar countries can take note on how it was able to pass politically and how it affects the economy.
The U.K. has introduced its own carbon floor tax that will take effect in 2013, but it is slightly different as it is complementary to the European Union’s Emissions Trading Scheme (EU ETS) and is affected by changes in the ETS. The Australia carbon tax, however, will be purely a domestic policy and isn’t applied to a trading system, making it a tax and not a floor tax.
Australia is the largest per-capita consumer of coal.
Australia has buckets of coal, accounting for 44 percent of all of its energy use. (In comparison, the U.S. uses 23.9 percent of coal.) China relies on coal for 66.5 percent of its energy use, but per capita, Australia is the highest.
Public opposition – which I will address shortly- has come from many in the mining sector who are worried about a carbon tax hurting the industry.
There is very similar opposition from oil industries in other countries.
While 44 percent of energy use comes from coal in Australia, oil accounts for 37.3 percent in the United States. If a carbon tax is successful, oil industries in other countries – such as the U.S. – can take note of the implications and learn from them. Also, governments can learn how to address industry grievances.
Public opposition is high.
Public opposition to the carbon tax is growing with 60 percent of voters – up 3 percent since last month – against the tax. This is slightly under Americans’ disapproval of a carbon tax that was at 70 percent last year. Also, Australian mining, energy, agriculture and food industry groups are worried about an increase in costs.
Australian Prime Minister Julia Gillard is trying to persuade the public to support the tax, lessons that can be learned by the U.S., among other nations.
First, the government announced earlier this month that half of the revenues from the carbon tax would help consumers tackle higher energy costs.
Additionally, Gillard recently ensured that energy industries will not suffer as countries in Asia will still buy Australia’s exported energy.
"The prospects in each country is for growth -- for wanting more of our resources, particularly more of our LNG. I'm absolutely confident that we will have a bright future for our energy exports with a price on carbon,” Gillard told The Australian newspaper.
So while Australia is not usually seen as a climate policy leader globally, the domestic policy can be a litmus test for national policies elsewhere. If Gillard successfully passes the carbon tax, other countries should take note of the process and repercussions when trying to introduce similar national policy options.
