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AUSTRALIA: Renewable Energy Wins, Controversially

Stephen de Tarczynski

MELBOURNE, Jul 14 2011 (IPS) - Australia has taken a major step in reducing its future greenhouse gas output with the announcement of a plan that will initially place a tax on every tonne of carbon pollution produced by hundreds of the country’s major emitters.

“Most Australians now agree our climate is changing. This is caused by carbon pollution. This has harmful effects on our environment and on the economy and the government should act,” said Prime Minister Julia Gillard in a televised address to the nation on Jul.10, just hours after the full details of the carbon scheme had been revealed.

The tax is the first step in the design that proponents say will see Australia reduce its greenhouse gas emissions by 80 percent on 2000 levels, an increase from the previous target of a 60 percent cut.

Australia is responsible for around 1.47 percent of global greenhouse gas emissions, similar to Iran and France, according to 2005 data from the World Resources Institute, the latest year for which statistics are available. Yet on a per capita basis, Australians are the biggest polluters among developed nations.

Despite this, there remains heated debate about how – and even if – Australia should reduce its carbon output.

Protests against implementing a carbon price and questioning human-induced global warming have been held in numerous Australian cities over the past few months – albeit often opposed in other areas by larger rallies calling for far-reaching government action. Climate scientists at leading universities have reported receiving death threats and abusive telephone calls.

Gillard has also faced severe criticism for walking away from a pledge made in the lead-up to last August’s election that “there will be no carbon tax under the government I lead.”

Explanations by the first woman to ever lead this country that, after failing to win enough seats to form government independently, the Australian Labor Party was forced to cut a deal with the environmentally-focused Greens party, in addition to two independents, appear not to have been accepted by all.

Polls suggest the government would lose badly if an election were to be held now.

Regardless, the plan is now in place and a supportive parliament is expected to usher through the required legislation over the next few months.

Under the scheme, around 500 of Australia’s worst greenhouse gas polluting businesses will be charged a tax of 23 Australian dollars for every tonne of carbon they release into the atmosphere from July 2012.

This price will be fixed for the first three years, after which the amount per tonne that polluters will be required to pay will be determined by a market-based system. Known as an emissions trading scheme, a limited supply of emission permits will be bought and sold by polluters in the second stage of the strategy.

The overall plan is to encourage major emitters to move to lower polluting technologies by making greenhouse gas releases increasingly more expensive while at the same time giving a major boost to the country’s renewable energy sector.

Ten billion Australian dollars has been set aside to invest in clean energy technology while a new independent body, the Australian Renewable Energy Agency (ARENA), has been established to run the research and development projects in solar, geothermal and biofuel energy already under way.

“It has been obvious for years that renewable energy programmes in Australia are a mess of badly designed photo opportunity schemes subject to changed rules and timeframes at the whim of ministers,” said Senator Christine Milne, the Greens’ deputy leader, at a press conference following the government’s carbon tax announcement.

“By bringing all these programmes under the independent authority, ARENA, we can finally deliver the consistent, systemic support the industry needs in order to challenge entrenched coal,” added Milne, who played a big part in the formation of the plan as co-deputy chair of the seven-member Multi-Party Climate Change Committee, established in September 2010 to thrash out a deal on introducing a price on carbon.

Coal is big business here, where around ten percent of the world’s reserves are located.

Australia is the fourth largest coal producer in the world – behind China, the United States and India – yet the most prolific exporter, supplying about 27 percent of global demand. The burning of coal at power stations also accounts for more than 83 percent of this country’s own electricity generation.

The carbon tax plan includes a commitment to close the larger coal-fired power plants by 2020. Despite a 1.3 billion dollar fund set aside to compensate workers for anticipated job losses in the sector as part of an overall 9.2 billion dollar assistance package available to affected industries over the scheme’s first three years, “entrenched coal” has been staunchly opposed to the plan.

“Coal is the industry that protected Australia from entering a deep recession during the GFC (global financial crisis), a fact widely recognised by most economists. It is Australia’s biggest export industry and contributes 3.5 percent to our nation’s economic growth,” said Ralph Hillman, executive director of the Australian Coal Association (ACA) in an address to the National Press Club on Jul.6.

“We should be leaping at the unique historical opportunity offered by the industrialisation of China and India to maximise the return on our resource endowment. The carbon tax will diminish that opportunity. Other countries will step into our shoes, reap the rewards and send emissions sky high,” argued the ACA boss.

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