The Australian Senate has voted to scrap the country’s carbon tax, despite being one of the world’s worst carbon emitters, due to its surfeit of cheap coal. Since its introduction two years ago, the tax has been the subject of bitter political struggles, with Tony Abbott, the current prime minister, having made a ‘pledge in blood’ while in opposition to abolish it. At a time whenclimate negotiations are entering a crucial phase, the repeal of the tax leaves Australia with no compulsory mechanism to meet its obligation to reduce its carbon emissions compared with 2000 levels by 2020.
The tax only came to be passed due to political necessity– the Labour Party needed the support of the Green Party, which was conditional on the introduction of the tax. Its abolishment is likely to be popular with much of the public – who have seen fuel bills rise in recent years – and with businesses and industry groups. Kate Carnell, the CEO of The Australian Chamber of Commerce and Industry, told the Associated Press that the tax “really did impact on the competitiveness of many Australian businesses and of course it put up the price of power.”
Comments by some members of Abbott’s government also suggest a degree of scepticism about the urgency of reducing emissions. One backbencher pointed out how cold the weather in Brisbane was, while agriculture minister Barnaby Joyce questioned the need for climate action by saying, “Look at the weather today, look at the way you are dressed, no one thinks it is too hot”.
Environmentalists have condemned the move as short-sighed and politically motivated. Former climate change minister Penny Wong told The Guardian that ditching the tax meant “this nation will have walked away from a credible and efficient response to climate change”. Though the government justified cancelling the tax by its supposed inefficiency, emissions data suggest otherwise. In the tax’s first year, emissions fell by 0.8%, while emissions from the electricity market on the east coast fell by 11%.
In place of the tax, the government has put forward a Direct Action policy, a voluntary scheme, which will offer AUS$2.5 billion (14.5 billion yuan) in grants to companies for reducing emissions, and have no overall cap. Yet though Abbott expresses confidence in the scheme, he has said that no more funding is available for the plan, even if Australia looks unlikely to meet its 5% target. It’s also unclear how any greater reductions would be achieved – which is one of the main goals of the Paris 2015 climate negotiations.
The Climate Institute’s chief executive, John Connor, told The Australian he had major doubts about the Direct Action plan. “What we are left with as potential replacement policy rests on three wobbly legs — a government fund subject to an annual budgetary arm wrestle, uncertain non-binding limits on some company emissions, and a renewable energy target under assault.”
The decision to scrap the tax may also send the wrong signal to other governments, according to Sanjay Vashisht, Director of Climate Action Network South Asia (CANSA), an umbrella organisation of hundreds of green NGOs in South Asia. “The move by Australia provides an excuse to those developing countries’ governments who do not want to take any action to control emissions. As it is, developing countries think the industrialised countries are shirking mitigation action while asking the poor nations to halt development. Now with this move, the trust deficit between developed and developing countries is going to get far worse. This move by the Australian government has now put a huge question mark on any effective climate deal being signed in Paris next year.”