Tamara-+Carbon+Tax+research

What is the carbon tax? At the centre of the government’s policy on climate change is pricing carbon. Many commentators and politicians have referred to this as a “carbon tax”. The idea is that polluters will pay per tonne of carbon they release into the atmosphere. This cost will initially be set at $23, and increase gradually until 2015, when we will shift to a trading scheme that will let the market set the cost. This is widely thought of as the most effective and least costly mechanism to reduce carbon output and reduce the level of climate change that is occurring. Right now, when you purchase a product that relies on carbon-intensive materials or manufacturing processes, the price you pay does not represent the cost incurred by the environment. The iron ore used to create the product could be sourced from the highest polluting mine in the world, the electricity used to power the manufacturing plant could be provided by the dirtiest coal mine in the world, and the trucks used to transport the product to its final destination in a supermarket could run on the dirtiest fuels in the world, and it would make no difference to the price. With a price on carbon, this equation would change. The amount of carbon pollution involved in producing a product would start to be factored into its final price. Products produced through dirty processes will become more expensive, thereby making it possible for other products produced through cleaner processes to compete on price. Yes, that’s right. The price of certain goods that are reliant on carbon pollution for their production will go up. However, the majority of Australians will be compensated for this cost, and this cost will be relatively small for most items. Visit the [|household compensation calculator] if you wish to find out where you stand once the price on carbon is introduced. How will this drive a move towards a cleaner future you might wonder. Well, it’s not hard to see that if pollution-intensive processes make goods more expensive, companies will look to reduce their pollution footprint in order to lower their costs. That’s what businesses do – improve efficiency year on year. It’s one of the key drivers of growth. For this reason, it is actually not necessary for the consuming public to change their practices, although that would help drive you own costs down. Inserted from <[]> WHAT IS IT? A flat charge of $23 per tonne of emissions will be levied on the top polluters. It is designed to change energy use and encourage investment in clean energy sources such as solar, gas and wind. In 2015, the tax will be replaced with a market-driven system, referred to as an Emissions Trading Scheme. WHO PAYS THE TAX? Only the nation's top 500 polluters, half the number originally planned. This is partly due to the government's decision to exclude fuel from the scheme. In total, 0.02 per cent of Australia's 3 million businesses will be taxed. Fuel suppliers and distributors and companies emitting synthetic greenhouse gases, including the refrigeration and air-conditioning industries, are exempt. WHERE DOES THE MONEY GO? The government has promised 90 per cent of households will be compensated in some way, with 70 per cent fully compensated either through tax cuts or increases to family payments. Pensioners will receive a rise, in line with cost of living increases. Money will also be allocated to high-polluting industries - such as coal - to help them move to cleaner energy practices. WHEN DOES IT START? If the Labor government wins the support of the Greens and the independents and passes its legislation, it will come into effect from July 1, 2012. WHAT DOES THE OPPOSITION WANT? The Coalition would scrap the tax and replace it with a $10 billion direct action plan. It would clean up the dirtiest power stations; provide financial incentives to the big polluters; and invest in reforestation programs and solar and other renewable energy methods. Inserted from <[]>

A price on carbon is the most environmentally effective and economically efficient way to reduce pollution. This means our economy can continue to prosper – without our pollution continuing to grow.
[|View All Questions »]

Questions Answered
**A.** More than half of the money raised will be used to assist households. The majority of households will receive tax cuts, increased assistance payments or both. With the rest of the money, the Government will be [|supporting jobs in the most affected industries] and investing in our clean energy future. //Find more questions about: [|Carbon Price], [|Household / Family]// **A.** No, it’s not a tax on households or small businesses – around 500 large polluters will be required to pay for their pollution under the carbon pricing mechanism. They account for around 60 per cent of our carbon pollution. For more information on the [|500 biggest polluting companies] //Find more questions about: [|Carbon Price], [|Household / Family]//
 * Q. ** Where will the money raised from the carbon price go?
 * Q. ** Will I have to pay the carbon price?

An environmental problem with an economic solution
Putting a price on carbon is the most environmentally effective and cheapest way to cut pollution. This is a fact that is well recognised by economists from around the world, and respected institutions such as the OECD and the Productivity Commission. Currently, releasing carbon pollution is free despite the fact that it is harming our environment. A carbon price changes this. It puts a price on the carbon pollution that Australia’s largest polluters produce. This creates a powerful incentive for all businesses to cut their pollution, by investing in clean technology or finding more efficient ways of operating. It encourages businesses across all industries to find the cheapest and most effective way of reducing carbon pollution, rather than relying on more costly approaches such as government regulation and direct action.

A carbon price means a strong and growing economy
The economy will continue to grow as Australia embraces a clean energy future. Treasury modelling estimates that under a carbon price:
 * Average incomes grow strongly under a carbon price. Average incomes are expected to increase by about 16 per cent from current levels by 2020, an increase of around $9000 in today’s dollars. By 2050, the increase is expected to be more than $30,000.
 * National employment is projected to increase by 1.6 million jobs by 2020.

Breaking the link between emissions and economic growth
The carbon price is the first element of the Government’s plan for a clean energy future: it will trigger a broad transformation of the economy. Our economy has successfully handled comparable structural changes over its history. In fact, transformative changes – new products and technologies, and the integration of our economy into the global economy set in train by the reforms of the 1980s and 1990s – have underpinned rising prosperity and sustainable growth in Australia. Treasury modelling shows that, under a carbon price, the economy continues to grow.

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Who pays the carbon price Around 500 of the biggest polluters in Australia will be required to pay for their pollution under the carbon pricing mechanism. These organisations will need a permit for every tonne of carbon pollution they produce – the cost of that permit is the carbon price. Households, small businesses and other organisations will have no direct obligations under the carbon price. A carbon price will not apply to agricultural emissions or emissions from light on-road vehicles. To find out which companies will pay the carbon price read [|Fact sheet 19: 500 biggest polluting companies].

What are the price impacts?
Some businesses will pass on the carbon price, leading to modest rises in prices. In 2012-13, this is expected to increase the cost of living by 0.7 per cent. The GST and related changes to the tax system pushed up prices more than three times as much as the carbon price is expected to. Many prices, particularly food, will hardly be affected. On average food will go up by less than $1 per week for households. Appropriate action will be taken against businesses that use the carbon price as an excuse to put up prices beyond the cost of carbon.

Households and jobs will be supported
Every cent raised from a price on carbon will be used to provide tax cuts and increased benefits to households, support jobs in the most affected industries, and build a new clean energy future. The Government will ensure that those Australians that need help the most, particularly pensioners and low and middle income households, will get assistance for the cost of living impact of the carbon price. Read more on helping households. The Government has carefully designed a number of measures to support jobs and competitiveness as we move to a clean energy future. Read more on helping business. Inserted from < []=

Over 4 million households get assistance worth 120 per cent of their expected average price impact
A typical couple with no children, with one person earning just under $60,000 and their partner earning around $25,000 will get assistance that is $288 per year more than their expected average price impact. A self-funded retiree couple with a single taxable private income of $50,000 will get assistance that provides $524 per year more than their expected average price impact. A low income single person earning $30,000 will receive $94 per year more than their expected average price impact. A couple, both earning $35,000, with two children, will get $247 per year more than their expected average price impact. The Government will ensure that those Australians that need help the most, particularly pensioners and low-and middle‑income households, will get assistance for the cost of living impact of the carbon price. On average, households will see cost increases of $9.90 per week, while the average assistance will be $10.10 per week. By 2012-13 Australia is expected to have almost 9 million households.

Over 4 million households will be better off compared to their average price impact
This means they will receive assistance that provides a buffer of at least 20 per cent over and above their average price impact.

Almost 6 million households will be assisted to meet their average price impact
This means they will receive assistance that covers at least the average price impact of the carbon price on their cost of living.

Around 8 million households will get some assistance
This means they will receive some assistance through payment increases and/or tax cuts. Households that improve their energy efficiency can help the environment and save money. Because households that do use less energy will still get to keep all of their tax cuts and payment increases, the carbon price will still provide them with a financial incentive to do their bit for the environment. Inserted From > []=

Is Australia acting ahead of others? People often ask why should Australia act to reduce their carbon pollution when other countries are not. The reality is that many other countries have already made huge steps towards reducing their carbon output, and that includes developing nations like China. Countries have started this transformation to take advantage of the economic opportunities stemming from the next stage of global development that will be powered by clean energy. A broad range of countries have introduced, or are planning, market based emissions trading schemes and carbon taxes. Australia’s top five trading partners —China, Japan, the United States (US), the Republic of Korea and India—and another six of our top twenty trading partners (New Zealand, the UK, Germany, Italy, France and the Netherlands) have implemented or are piloting carbon trading or taxation schemes at national, state or the city level. Many countries have renewable energy targets, including fourteen of Australia’s top twenty trading partners. Energy performance standards for appliances, buildings and industrial plants, as well as incentives for the use and development of low emission products and technologies are now widespread. In fact, China has pledged to quadruple its current investment of [|almost $50 billion per year] on renewables with the aim of reaching a total of 500GW of renewable energy output by 2020. Right now, [|China already has 44.7GW] of wind energy production (we have a little more than 1Gw). In fact, of all energy infrastructure built in China over the course of 2010, [|26% of it is renewable] !

Implemented and planned climate change actions in major emitting economies The European Union enacted an emissions trading scheme in 2005 which places a cap on the amount of carbon dioxide and nitrous oxide that can be emitted by big polluters. It operates in the 27 EU member states as well as Iceland, Liechtenstein and Norway and covers power stations, combustion plants, oil refineries and iron and steel works, as well as factories making cement, glass, lime, bricks, ceramics, pulp, paper and board. Their current target is a [|21% cut of 2005 emissions by 2025] (Australia’s is a 5% cut of 2000 emissions by 2020). Some EU nations have pledged even greater cuts to their emissions. The UK, for example, has pledged to cut [|50% of its 1990-level emissions by 2025]. The US has its own cap and trade legislation in the works, although this has stalled in the Senate due to big Republican wins in the mid-term elections. Nevertheless, many US states have taken steps to implement their own strategies to cut their carbon output. California, aside from providing massive incentives to renewable energy companies, [|has implemented its own cap and trade regime] (although this has been delayed for a year to ensure compliance). The New York governor [|in 2009 signed an executive order], pledging an 80% cut of 1990 emissions by 2050 (our target is an 80% cut of 2000 emissions by 2050). Many more states have taken steps to reduce their carbon output, and the US Environmental Protection Agency has a comprehensive list [|here].

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Australia’s clean energy future Scientists advise that the world is warming and high levels of carbon pollution risk environmental and economic damage. No responsible government can ignore this advice. The Australian Government has developed a comprehensive plan to move to a clean energy future. Central to that plan is the introduction of a carbon price that will cut pollution in the cheapest and most effective way and drive investment in new clean energy sources such as solar, gas and wind. A carbon price is not a tax on households – around 500 of the biggest polluters in Australia will be required to pay for their pollution under the carbon pricing mechanism. To assist households with price impacts, there will be tax cuts and increases in pensions, allowances and benefits. A significant tax reform will mean that over 1 million individuals will no longer need to file a tax return. The Government is committed to supporting jobs and competitiveness as Australia moves to a clean energy future and has designed a range of measures for this purpose. The Government will seek to negotiate the closure of around 2000 megawatts of highly polluting electricity generation capacity by 2020, while at the same time safeguarding our energy security. There will be a dramatic expansion in support for renewable energy including through a new commercially oriented Clean Energy Finance Corporation that will invest $10 billion in renewable energy, low pollution and energy efficiency technologies. Around $1 billion will be spent over the next four years to help farmers and land managers pursue climate change action on the land and promote biodiversity. Improvements in energy efficiency will help households save money on their bills and contribute to our efforts to cut pollution. Pasted from <[]> Household Impact & Compensation The carbon pricing scheme will impose costs on big polluters, which will result in higher end prices for certain products. Treasury estimates that an average family will pay $9.90 more per week in the first year of the scheme’s introduction.

Treasure modelling on the impact of pricing carbon on household expenses There are two measures that have been introduced as part of the package to soften the impact of these price rises. Firstly, the tax-free threshold will be more than tripled from $6,000 to $18,200, exempting 1 million people from the need to pay income tax or file a tax return. People earning less than $80,000 per year will also receive a tax cut, which for most will equal approximately $300 per year. Secondly, generous assistance will also be provided to households through welfare payments. Pensioners and self-funded retirees, as well as family payment recipients and other allowance recipients will see their payments increase. Millions of households, particularly pensioners and low income households, will be better off. The level of compensation will see the vast majority of people be fully compensated for the price increases, and many will actually end up better off. Plus, if you can reduce your dependence on carbon-intensive products you could end up even better off still. For more information about your specific entitlements, please try the [|Household compensation calculator]. This post is based on a briefing paper from the [|Environment Defenders Office Victoria] Pasted from <[]> JOHN Button was a politician and minister renowned for making hard decisions. More than that, he was a reformer and a visionary. He was a man deeply grounded in Labor values who understood that the future of manufacturing in Australia depended on re-skilling, productivity through capital investment, and competing in the global market. As minister for industry and commerce from 1983 to 1993, Button carried through significant changes in industry policy, lowering tariffs and reducing other forms of economic protection. He led the transformation of Australian manufacturing from myopia and insularity to dynamism and export-focused competitiveness. None of these reforms was easy. Precious few were popular at the time. Within the labour movement these were controversial reforms indeed. One has only to recall the special place of tariff protection within Australia's 20th-century economic history and orthodox labour movement thought. But Button knew that working Australians were better served by embracing economic change, rather than pretending it could be avoided. He knew Labor values of fairness and justice were best advanced by building economic strength and resilience, not through economic atrophy.

If we are to carry this legacy into the future, we must again make difficult decisions. A central challenge is to transform our economy from one that has the highest per capita level of greenhouse gas emissions among developed economies to one that can generate energy, develop products and export goods while reducing carbon pollution. Reducing the emissions intensity of our economy is not a transformation to be feared. It is a future that must be embraced for environmental and economic reasons. On July 10 the government announced a comprehensive blueprint to move to a clean energy future. Reducing our carbon pollution means we have to produce and use energy in a cleaner, smarter way. The government's plan for a Clean Energy Future will achieve this through: •Introducing a carbon price and using every cent raised to assist households, support jobs and tackle climate change; •Promoting renewable energy; •Encouraging energy efficiency; •Creating opportunities on the land to cut pollution. The government considered two key questions when it designed the Clean Energy Future plan: can the policy deliver the reductions in pollution we need and will it do this in the cheapest and most equitable way? The first question is crucial for the credibility of any climate change policy. The carbon price mechanism is an emissions trading scheme designed to cut emissions by at least 160 million tonnes in the year 2020, and continue to cut emissions each year to achieve an 80 per cent reduction over year 2000 levels by 2050. This represents Australia's fair share of the global effort to reduce emissions. The second question is essential for maintaining a strong economy and minimising the cost of adjustment for households and businesses. This is why the core of the government's plan is a carbon price. A carbon price is the most efficient policy instrument because it sends a market signal about the pollution content of goods and services consumed. It will drive a restructuring of our economy, stimulating a move away from highly polluting technologies and products towards cleaner technologies and products. And it will do this at the lowest cost. Significant economic reform is almost always portrayed as a negative. The temptation is to resist change. But to leave things as they are risks externally imposed adjustments - perhaps the present debt crisis in Greece and elsewhere in Europe is a case in point. As with the reforms of the 1980s, present-day economic reform must be undertaken in the national interest, to ensure we remain competitive in a global economy. In the low-carbon world of the future, businesses, investors, researchers and innovators who find cleaner and more sustainable ways of doing business will secure a competitive advantage. I am confident we will see the innovation and investment necessary to transform the economy. But achieving this transformation must be driven by more than just a carbon price. Additional innovation programs will complement the carbon price. To help drive further investment in clean technologies, the plan includes a new $10 billion Clean Energy Finance Corporation. In addition, a new, independent statutory body, the Australian Renewable Energy Agency, will be created to co-ordinate about $3.2bn in grant funding supporting research, development and demonstration of new renewable technologies. Along with the carbon price and the Renewable Energy Target, these programs will drive the biggest expansion in the clean energy sector in Australia's history Once the Clean Energy legislation passes the parliament and a carbon price is introduced next July, the task of reforming our economy, reducing pollution and maintaining security will begin. And just as we look back and honour Button for his vision, leadership, tenacity and political courage, so we should take inspiration from his legacy. The modern Labor reform legacy was built on two fundamental concepts. First, delivering growth through open international trade and market-based reforms to the domestic economy. Second, a commitment to equity and fairness, to ensuring all people secure a fair share from the economy's growth. I am proud to be able to locate the Gillard government's plan for a clean energy future squarely in this Labor reformist tradition. Our plan is pro-growth: an efficient carbon price, linked to international carbon markets, to drive a restructuring of the domestic economy. Our plan also ensures equity: households will be assisted through tax cuts, increases in family benefits and higher pensions, targeted at low and middle-income earners. If John were still with us, I believe he would be relishing the fight just as much as he would approve of what we are doing. This is an edited text of the 2011 John Button Memorial Lecture, delivered by the Minister for Climate Change and Energy Efficiency, Greg Combet, yesterday. Pasted from <[]>

Carbon price a big win for renewable energy jobs in Central West

Monday 29 August 2011

Regional NSW is set to gain a substantial boost in jobs and economic activity from a carbon price if the O'Farrell government drops its hostility to renewable energy and stops dog whistling to climate change deniers, according to Greens NSW MP John Kaye.

Dr Kaye, who is in Dubbo to talk to local residents about the carbon price package said: "The carbon tax package has the potential to create tens of thousands of new jobs in the clean energy economy, starting right here in the Central West.

"If Barry O'Farrell doesn't drop his objections to the carbon tax and get on with the business of phasing out coal-fired power stations, NSW will squander the opportunity for tens of thousands of new jobs.

"The Greens went to the last election committed to building three solar thermal power plants in the Central West, aimed at kick starting regional economies and providing long term green jobs.

"Now that a price on carbon will discourage further use of fossil fuels and invigorate investment in cleaner energy, real jobs and economic activity in places like Dubbo can go into boom if the state government puts the effort in.

"Inaction and continued hostility from the O'Farrell government might be clever politics in the short term but it will see the Central West left behind in the race to a low carbon future.

"Direct state investment in solar thermal power stations in the Central West, and forcing the retailers to pay a fair price for the electricity from rooftop units will take NSW into a jobs boom" said Dr Kaye.

Note: Dr Kaye will present a seminar and workshop from 6-8pm on Monday 29 August 2011 at the Pastoral Hotel, 110 Talbragar St, Dubbo.

Dr Kaye is available for interview by mobile phone or in person by arrangement.

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THE impact of the carbon tax on the mining industry will be "trivial" - so small that for practical purposes it will be "invisible," according to one of Australia's leading labour market economists. Professor Bruce Chapman is president of the Economics Society of Australia and director of policy at the Australian National University's Crawford school of government. In a report released this morning entitled How Many Jobs is 23,510 Really? he attempts to put into perspective a claim by the Minerals Council that a carbon trading system would cut by about 24,000 people the number who would be employed in the mining industry. "Something like 370,000 people every month go from not having a job to having a job, and something like 365,000 people every month do the opposite," he said. "That's the change every month. The Minerals Council has projected its change over a period of 10 years. "The additional outflow would be five people for every 10,000 who would have left in the month anyway. I am happy to call that invisible. I was going to draw it for the report but I couldn't - you can't draw a graph because the effect is too tiny. "What it says is the carbon price debate should have nothing to do with job-loss figures. The labour market issue should be seen to be irrelevant. It is not interesting, it is not something we should spend any further effort analysing." The report prepared for the Australia Institute also challenges the assumption that any mining workers who did lose their jobs would fall into unemployment. Using data from the household income and labour dynamics survey, Professor Chapman finds that in the previous mining boom 26 per cent of mining industry employees left the industry each year. "On average [about] 36 per cent of people employed in mining are inflows, having arrived that year. [About] 26 per cent are outflows - they won't be there the next year," he said. "This extraordinary mobility suggests strongly that any supposed job losses would be dwarfed by natural attrition." The seven-year study finds that workers leaving mining almost always go to other jobs. "Nobody who left mining after 2001 was unemployed when observed a year later," the report says. "The vast majority of those leaving mining sector employment were employed in other jobs in all the years following. "When you talk about job losses people think about jobs actually being cut whereas the industry is talking about jobs that would not be created. You also think about people being sacked and going into long-term unemployment and becoming destitute. In the mining industry that is not correct," Professor Chapman said. The report says the misuse of big-sounding jobs claims to describe very small effects is widespread.  "As an example the release of the Murray-Darling Basin Plan encouraged assessments of direct jobs in the range of [about] 3500 to 12,000. The Climate Institute has claimed that a shift in production towards cleaner energy will result in [about] 34,000 net new jobs in the Australian power sector by 2030," the report says. "Obviously the issue relates to both sides of the carbon price debate." <[]ml