The carbon tax debate rages on

Indian Link gauges the mood of the Indian Australian community on the issue

The Australian government’s proposed tax on carbon emissions has led to widespread debate about the viability of the measure. To add to the confusion, the charge and counter-charge between the government and the opposition have sent conflicting signals to the country. Even supporters of the move are concerned that the initiative may fall victim to political complexities. On the other hand, sceptics have been arguing that the proposed move will hurt the country’s economic growth.

Indian Link sought to gauge the mood of the Indian community on this contentious issue, and as expected, opinions differed. While many termed the introduction of carbon tax as a positive step, others seemed to question its merits. Here are some of the responses.

Say no to carbon tax!

It’s hard to believe anything that politicians say these days. Four days before the election last year, Prime Minister Julia Gillard had declared that “there will be no carbon tax under the government I lead”. But as soon as it was clear that the Greens held the balance of power in the Senate and had a crucial role in Julia Gillard getting “The Lodge” in Canberra, the Labour Party and their first female Prime Minister backstabbed Australia and announced that they would support the carbon tax.

This will bring Australia to a complete halt. Just think about the present situation. Our electricity bills have doubled in the last four years and will undoubtedly increase further even without a carbon tax. Add a carbon tax and it will be impossible to use any electric appliances in future. Then there is the case of rising petrol prices. Next is your all-important grocery bill. The price of raw food in Australia is one of the highest in the world, and it has been increasing faster than inflation. The carbon tax will undoubtedly push grocery prices through the roof.

We are already paying some of the most expensive mortgages and taxes in the world. All of us are affected by these increases. Some of us have cars and mortgages, but almost all of us pay income tax and buy groceries. A further tax without any extra source of income is just pure insanity.

What is even more evident is that unlike GST that John Howard introduced, the carbon tax would not be a constant figure. It will very likely start from a low price and will continue to move upwards. Labour party honchos like Greg Combet say that the government will compensate families with generous handouts, but does anyone really believe him?

What is the guarantee that the compensation by government would be enough to pay for increased expenses?

I’m not a climate change denier nor do I think pollution is all-natural. Of course, humans are playing their part too. But what I really don’t understand is how Australia can achieve anything by destroying its industries, economy and way of life for something that is supposed to be a global problem?

The latest figures show that the Australian economy is going backwards. The Aussie dollar is way too strong, and as a result key industries like mining are losing ground. We all know that the Australian economy heavily relies on the progress made by the mining sector. A small change in the Australian dollar is causing reduced growth in exports. Imagine what will happen when we will tell the rest of the buying world that now our exports are not only expensive due to a strong dollar, but we would also charge an extra carbon tax.

I don’t think I have to explain what will happen next. The time has come for ordinary people like us to speak up and tell the government that enough is enough. Say “No” to carbon tax before it’s too late!

Mark Sharma

Sydney

Yes and a hefty one at that

Climate change is certainly one of the most complex issues facing man-kind. Unfortunately whilst everyone is happy to acknowledge that, no one wants to be the first to move – be it to make energy cleaner, or to stop exporting “dirty” coal or to pay more for electricity.

And yet it is apparent that for us to really make a difference, we can’t just sit on our hands and do nothing.

The Government’s proposed carbon tax has been great political capital for the Federal Liberal party which refuses to be constructive on any issue facing this country. The mother of all scare campaigns has been launched and if one were to believe it, the carbon tax will obliterate industry, agriculture and mining and turn Australia into a wasteland full of unemployed people. The “direct action” campaign of the Libs is a big joke. Green army, planting more trees etc. – this is sub-juvenile stuff that 7 year olds dream up!

The truth is that there needs to be a carbon tax and a hefty one at that. People are not going to change entrenched and wasteful habits or lessen their huge carbon footprints (one of the largest per capita, in the world) without punitive taxes and consequences.

Of course, vulnerable sections of society will and should be compensated – but, this fact is being conveniently overlooked by vested interests opposed to the tax.

This is not a tax that the Government is raising to spend – it is a zero sum game wherein all of us need to do our bit and change our way of life so that the planet can survive many decades of our past abuse.

On its own, the Labour Government would have been pusillanimous and rather avoided this issue, but the Greens have stiffened their spines and good on them!

Darshak Mehta

Sydney

Yes, as soon as possible

If I were to speak considering the economy, I’d say no as it might affect the mining companies and the economy is driven by them.

However, as a citizen of this country I feel that the tax should be applied as soon as possible. Globally, we are buying so much fuel to generate power. All this is affecting the climate very badly.

I think the carbon tax will make people more conscious of the climate and the need to protect it. I understand there is a political side to the story, but at the end of the day it’s a good measure which will help the environment.

Utkarsh Dubey

Sydney

For the sake of coming generations

The proposed carbon tax will benefit the country and the environment.  I think we shall all play a part in ensuring that our coming generations can breathe in a better environment.

Its financial impact on people can be limited when it’s implemented on a wider scale. There is an urgent need to bring in such measures now, before it is too late.

We should also request other countries to tighten their carbon norms. The failure of the Copenhagen Summit tells us that we need to build a consensus on such issues.

Navjeet Matta

Sydney

Education is the key

My biggest complain is that the government has not done enough to educate people about the need to implement the carbon tax. It is a difficult issue, and Prime Minister Julia Gillard’s flip-flop attitude has not helped.  Many see it as a ploy to ensure Gillard continues to enjoy the support of the Greens. Other countries in the world are not doing it yet, because their economies don’t allow it.

Even if Australia implements it, emissions from countries such as China and India are not going to come down.  So I wonder how much of a direct difference it is going to make globally. However, it is a positive step. If we manage to implement it, maybe other nations will be influenced to follow suit as well.  So it’s not such a bad thing, considering how many natural disasters we see these days, which are related to global warming. I think common sense needs to prevail here.

Syed Kabir

Sydney

It’ll help us focus on cleaner energy

Carbon tax should be implemented as soon as possible without any further delay in order to reduce CO2 emissions. The disadvantage at the moment seems that the cost of living will increase for households by this tax, but in the long term, quality of life will improve in terms of having cleaner environment. Implementing the carbon tax will also reduce dependence on coal energy and will pave a way for focusing on cleaner energies such as wind and solar energies, which have been underestimated and underinvested in till now.

Sanjay Goel

Sydney

Small businesses not ready to take another hit

Australia is home to some of the most beautiful natural environments on earth and it’s imperative to our economy that we protect these. The World Heritage listed Great Barrier Reef alone is worth about $5 billion to our economy. It is a precious natural icon and we are its guardians.

It is fair to expect that any tax will have to be passed on to the consumer. But the simple fact is that small businesses don’t need this. We have just endured the GFC, multiple interest rate rises and multiple natural disasters with lasting impacts in the business community. The consumer is already shying away from the retail market. For this to be followed up with an added tax adds insult to injury. The tax will hit small business in the hip pocket with higher costs for electricity and fuel, and that’s at a time when some businesses are struggling to stay afloat. Just walk down to your local shopping strip and see the number of ‘To Let’ signs. We need clarity on the carbon tax objective to reduce carbon pollution, but I’m concerned that the current proposal could be tainted by the political imperative to do a deal, rather than what’s best for the nation and the people. I’m not saying we should do nothing. We should do the right thing. The issue of climate change is something we need to get right because the cost of doing nothing is just as high.

Harvin Dhillon

Melbourne

Carbon pricing an urgent necessity

Given the incontrovertible evidence that the planet is in danger as a result of excessive levels of carbon emission, I simply can’t wait to see a carbon pricing scheme in operation. The scheme, as it is conceived, is actually the second best but I am hoping that it will eventually lead to a full blown market-based pricing scheme such as the Rudd government’s ETS which derailed a year and a half ago.

I don’t buy into the argument that a carbon tax will impose an unacceptable burden on struggling families because the way the scheme is being constructed, there will be inbuilt compensation for low-income household. But even if this wasn’t the case, I am confident most Australians would accept the sacrifice as a cost of world leadership, pretty much as they are accepting the costs, both in terms of lives and money, of our participation in the Afghanistan campaign. Australia is proud of its reputation as a nation that punches well above its weight, and it is well understood that means making more than just a proportionate contribution to global projects.

Nor can I accept the you-go-first approach that wrecked the Copenhagen climate conference and is apparently supported by some of our short-sighted politicians; nor the puerile view that Australia need not act because any reduction it can achieve in carbon emissions will not make a jot of a difference to overall levels. That is not the stuff of leadership. Had that view always prevailed, we would not have fought side by side with other responsible nations in the World Wars or in Iraq and Afghanistan. We did that simply because morality demanded it.

I sincerely hope that the climate change committee will quickly reach a deal and get something moving.

Om Khushu

Melbourne

Leading by example

This debate has been going on for some time now.  Sadly, the carbon debate has been politicised in this country, instead of moving towards a consensus on the issue. It is true that coal is one of the primary pollutants, but it is also the golden goose for Australian economy. This tax will affect the mining sector. Having said that, in the long run, a viable solution to curb carbon emissions has to be found. Ordinary Australians, including the Indian community here, I believe, would not have a problem with paying a little for a good cause, and would look at the tax as doing their bit for a better environment. I think more than the tax, it is the way it has been handled that has left us asking a lot of questions. By implementing the tax, Australia can send out a message that it is a responsible country which does not mind taking the lead in tackling issues of global importance. I think it will raise our standing in the world as a forward-thinking and responsible nation.

Lakshya

Canberra

Will not achieve anything

In principle I agree that there should be a carbon tax. Something needs to be done about the poor health of the environment. But a tax is not the solution. What the government’s proposed tax will achieve and how, is not clearly defined at all. Will it go towards R&D on alternate sources of energy, for example? Overall, I don’t think the carbon tax is going to achieve anything.

Shyamal Bhatia

Sydney

 

About carbon tax

‘Carbon tax’ has become the Labor Party’s watchword, and the Liberal’s bugbear. So what exactly is the background behind the debate? Here are some facts that put the issue into perspective, and could possibly help us decide on what’s best for Australia.

The government plans to tax the carbon pollution caused by burning fossil fuels, including coal and petroleum. A carbon tax puts a price on the carbon released when fossil fuels are burned, and this includes the cost of the environmental damage caused.

Taxation of liquid fuels and coal takes account of both their energy content and carbon dioxide emissions, and also emissions into the local environment that have adverse health effects.

With such a tax, businesses will be forced to develop and use technologies that reduce carbon emissions. These could be in the form of fuel-efficient cars and renewable energy sources. Individuals too, will have to consider their use of fossil fuels, including the cars they buy and the appliances they use.

But emitters will be the hardest hit, as using carbon-based fuels would eventually cost more than reducing their use of fossil fuels.

With a price on carbon, the government will tax each tonne of carbon pollution released when fossil fuels are burned. The carbon price is a tax rate set by the government; the Gillard government is yet to finalise this price.

Winners and losers

The tax will include the stationary energy, transport and the industrial processes sectors, but agriculture will not be included in the scheme.

By putting a price on pollution, we are aiming to make clean technology cheaper in the long run.

Governments, economists and business leaders around the globe agree that levelling the economic playing field by placing a price tag on pollution is one of the best ways to reduce pollution.

If it’s cheaper to produce clean energy than it is polluting energy, businesses will invest in solar, wind and geothermal projects across the country, thus creating new jobs within new industries.

But introducing the carbon tax would mean that goods and services that rely on carbon emission will become far more expensive.

Electricity in Australia comes from coal, so prices of electricity will increase significantly, thus affecting the common man

A carbon tax could disproportionately affect low income groups, but this can be addressed by using tax subsidies to support these groups.

The need for a cleaner world

It is a fact that we need to reduce pollution and tackle climate change, which has been proved as a factor destroying the world’s eco-balance. However, the only way we can produce food, use transport, build houses and make clothes is through methods that are polluting in themselves.

We need to switch to clean energy sources like wind, solar or geothermal power. Australia has the means and ability to support these new technologies and in time, we could become a clean superpower.

But the crux of the problem is that with our current economy, clean technology is much more expensive than the old, outdated technology that creates pollution. And this is why we lack the incentive to switch to cleaner technology.

Australia’s efforts to tackle pollution are falling behind other developing nations.

Australia’s emissions projections had increased by four percent since 2007 to 24 percent above 2000 levels by 2020, due to its surging resources sector.

Heavily reliant on coal-fired power and mining exports, it is one of the world’s worst per capita polluters

A carbon tax can be implemented by taxing the burning of fossil fuels like coal, petroleum products such as gasoline and aviation fuel, and natural gas in proportion to their carbon content.

 

Across the world

Finland introduced the world’s first carbon tax in 1990. Initially the tax exempted a few industries and fuels. In 2010, Finland’s price on carbon was €20 per tonne of CO2. Natural gas has a reduced tax rate, while peat was exempted between 2005-2010.

The Netherlands currently levies a general fuel tax on all fossil fuels. Fuels used as raw materials are not subject to the tax. Tax rates are based on both the energy and carbon contents of fuels.

Sweden introduced a carbon tax in 1991 and raised it prices on fossil fuels. It cut its carbon pollution by 9 per cent between 1990 and 2006.

India introduced a levy on coal producers in 2010, and is expected to raise $535 million from the tax, the first measure used by the subcontinent to reduce companies’ use of fossil fuels.

Norway began the tax on carbon in 1991; but its carbon emissions increased by 43m per cent per capita between 1991 and 2008.

Denmark’s tax came into being in 1992 and applies to all energy users, including the industrial sector. However, industrial companies are taxed differently depending on how and for what the energy is used, and whether or not the company has entered into a voluntary agreement to apply energy efficiency measures. Denmark’s per capita carbon dioxide emissions were nearly 15% lower in 2005 than in 1990.

Switzerland introduced a carbon incentive tax in 2008, including all fossil fuels, unless they are used for energy. Swiss companies can be exempt from the tax if they participate in the country’s emissions trading system. Overall, greenhouse gas emissions in Switzerland remained stable between 1990 and 2007.

Ireland’s tax on oil and gas came into effect in 2010 and was estimated to add around €43 to filling a 1000 litre oil tank and €41 to the average annual gas bill

Costa Rica enacted the tax on carbon pollution in 1997, set at 3.5 per cent of the market value of fossil fuels. The revenue raised from this goes into a national forest fund which pays indigenous communities for protecting the forests around them.

Major global economies like the United States, Japan and the European Union are making ambitious, if not strong pledges to reduce emissions.

China, the world’s largest emitter, had already made considerable progress in reducing emissions.