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 7News. Power 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.

EU Carbon Tax: India bans its airlines from paying

Some call it carbon tax. Some call it green tax. I call it save-my-butt tax. Period

Not too long ago China barred its domestic airlines from complying with the European Union's scheme to impose charges on carbon emissions from flights to and from Europe.

Not an AirIndia plane. Just one of AirAsia's during my recent trip.

Last month (March 2012) India joined China to resist the so-called green-tax scheme. For the record many other countries, including the United States and Russia have opposed to the charges.

The purpose of the tax, according to EU is to cut emmission by 20% by 2020. EU has 27 member countries. I think what it will do is it will lift the EU economy by collecting carbon surcharge from whoever make a stop in the European countries and it will at least help some who are in economic crisis.

As to how exactly such tax reduce the emissions of carbon, I don't understand. Could it be that the plane would reduce the amount of fuel consumed when the plane get pass EU's airports? Or will the tax monies be put to make the plane to be smarter by burning fuel more efficiently? It's just perplexing!

China plus India is quite big but if the US also ban its airlines from paying such taxes, that would be quite substantial!

Read the rest of the news
New Straits Times, 23 March 2012

NEW DELHI: India has barred its airlines from complying with the European Union carbon tax scheme, joining China in resistance to plans that have caused a backlash among the EU’s trade partners. The European Union imposed a carbon levy on air travel with effect from January 1, but no airline will face a bill until 2013 after this year’s carbon emissions have been tallied.

Civil Aviation Minister Ajit Singh told parliament on Thursday that “the imposition of carbon tax does not arise” because Indian airlines would simply refuse to hand over their emissions data.

“Though the European Union has directed Indian carriers to submit emission details of their aircraft by March 31, 2012, no Indian carrier is submitting them in view of the position of the government,” he said.

India’s resolution to boycott the scheme follows China’s decision last month to prevent its airlines from complying with the EU directive. The two Asian giants have attacked the EU scheme, calling it a unilateral trade levy disguised as an attempt to fight climate change.

According to a so-called Moscow declaration adopted last month by countries opposed to the tax, governments have decided on a list of retaliatory measures to be taken if necessary, including banning their airlines from participating.

It also allows governments to take tough retaliatory measures against EU carriers and aviation companies and impose their own taxes on EU airlines. The 27-nation EU has said the carbon tax will help it achieve its goal of cutting emissions by 20 percent by 2020 and that it will not back down on the plan.

It claims that the cost for the airlines is manageable, estimating that the scheme could prompt them to add between 4.0 euros ($5.50) and 24 euros to the price of a long-haul round-trip.

Industry insiders have expressed concern that the scheme could spark a trade war between the EU and the countries opposed to the tax. The chief executive of European plane manufacturer Airbus, Thomas Enders, called for a “freeze” on the EU plan Thursday, saying that it would otherwise cost the sector thousands of jobs.

“Delay it, freeze it for one or two years,” he said according to Dow Jones Newswires, arguing that the scheme “will do nothing but induce strife... retaliation and counter-retaliation.” Earlier this month the head of the Airbus parent company EADS said Beijing had already begun to block purchases of Airbus planes by Chinese companies in reaction to the dispute. -- AFP