Carbon Tax Essay

A number of countries have Implemented carbon taxes or energy taxes that are related to carbon content. But some are taxed on energy products and motor vehicles rather than on carbon dloxlde directly. In June 2010, Julia Gillard defeated Rudd In a leadership challenge thus becoming Prime Minister of Australia. Shortly afterwards she called a federal election. During the election campaign Gillard stated that she supported a price on carbon emissions and that she would prosecute the case for action for as long as she needed to win community support.

However, she also ndicated that she would not Introduce carbon pricing until there was a sufficient consensus on the Issue, and she specifically ruled out the Introduction of a “carbon Kelly and Dennis Shanahan, 2010) When it was introduced on July 1, 2012 its primary goal is to reduce the countrys total emissions of greenhouse gases (GHGs). Initially it is only the Australia’s first 500 highest polluting companies that were expected to pay a flat charge of $23 AUD per ton of C02-e produced. Now I think the number of companies that are being taxed have increased.

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And this rate is estimated to change and likely to Increase to 2. percent above Inflation rate annually. The Australian government thought that It will be a solution to the problem of climate change and an investment in a clean energy source. As we know, the country has the highest per capita carbon footprint in the world because it merely relies on coal fired electricity station. These stations are responsible for 40 percent of the nation’s emissions. The government has set a target of generating 20 percent of Australia’s power from renewable energy sources by 2020. Sridhar, 201 2) While, implementing the carbon tax may be a move towards counteracting the countrys lag n switching emissions to renewable energy, making carbon-neutral Investments and establishing climate change best practices there are its consequences for majority of Australia’s household and industries. In other countries, carbon tax has been implemented to fund their clean energy and energy savings projects. Like in India, coal is used to power more than half of the countrys electricity generation.

Implementation of a carbon tax that was Introduced In India on July 2010 has not been favored the rates by Industry bodies because they fear that this will result to a higher price of coal and it could trigger inflation. The clean energy tax was imposed to help finance the National Clean Energy Fund (NCEF). While many in India remain hesitant, carbon tax is a step towards helping the country meets their voluntary target to reduce the amount of carbon dioxide released. In Japan, carbon tax was introduced In October 2012 with a goal to take action in alleviating dangerous climate change.

As we know Japan has suffered a massive tsunamlattack on March 2011. The structures and the loss of lives. The disaster has affected international trade since lapan has been one of the world’s providers of electronicequipment. And people hought that the incident was brought by the neglect of people to care for the environment. Japan wanted to impose carbon tax to help support their environment and their clean energy saving projects. In China, the government also introduced carbon tax pricing.

China has the largest manufacturing firms in the world because of its cheap labor. Almost all products from toys, clothing and electronics are being manufactured in China and they as well cannot escape from the carbon taxing to make sure carbon dioxide output is set to the limit. The recent implementation on Australia’s “Carbon Tax” affects the majority of industries in the country. Like any tax, the carbon tax had impacted the entire Australian economy. It affected its gross domestic product, industrial policies and structure and foreign trade.

The biggest airline industries Qantas and Virgin Australia have protested against the implementation of carbon tax. As these major companies serving millions of people travelling all over the world are the biggest fuel users. Qantas chief executive Alan Joyce said to reporters of Brisbane: “Having regions or individual countries imposing an emission trading scheme or a carbon tax can cause distortions for the industry and will cause distortions to the industry and hey have a negative impact. “(Harper, 2010) Virgin Australia airlines have calculated an increase of $3. 0 and implemented a surcharge of between $1. 50 and $6. 00 to a one way flight beginning July 2012. As per Qantas it raised its ticket prices between $1. 82 and $6. 86. This will affect international trade as millions of people from businessman to students all over the world are travelling from one country to another through the use of airplanes. Most products that are being exported and Imported are also shipped throughair as they needed to be delivered as soon as possible. That increase in airfare is Just too much to bear for businesses and travellers. O’Sullivan, 2012) GE a multi-national technology, services and finance company also acted in response to carbon tax. GE made a study when carbon tax was introduced then and found that most companies were holding back investments until there were greater certainty on carbon pricing. Business leaders were positive about the prospects of a low-emission economy but 54 percent of them said that opportunities have outweighed the threats. GE Australia CEO Steve Sargent said the study showed businesses were moving to address climate change.

It also suggests a broad acceptance and preparedness for the transition to a low-carbon economy but uncertainty is holding them back. “A clearly defined carbon policy framework is a crucial element to encourage further change in business behavior. ” Sargent said. Osborne, 2011) One of the most significant disadvantages of the carbon tax in Australia isin the name itself. The general public often sees any increase in taxes, Including the introduction of a carbon tax, as a negative standpoint, and the Australian government has certainly struggled to get support from the general public or this regulation.

A second limitation of the carbon tax is that agriculture is not subject to the tax. Agriculture, particularly livestock farming, accounts for 18 percent of global GHG emissions. The third limitation is in the policies associated with the carbon tax. If the government reimburses much of the revenue from the carbon tax of the carbon tax is that it will push companies and industries to shift operations to other countries that have few or no pollution costs. (Sridhar, 2012) It is not Just the industry that is affected by carbon tax but consumers as well.

We ad all experienced a raise in prices of most products and services that we use. Carbon tax has become an additional cost to the company and that is being passed on to consumers. If this will continue to increase then most likely there will be an annual increase in prices of goods and services as well. ln May 2012, the Australian Competition and Consumer Commission (ACCC) reported it is investigating about 100 cases where customers are may be being misled into paying excessive price rises falsely claimed to be as a result of carbon tax.

By the middle of June, the commission Nas investigating about 200 cases. The consumer watchdog also set up a phone hotline and online form for complaints regarding excess pricing claimed to be due to the carbon tax. (Kerin, 2012) The government imposing carbon tax has faced a lot of criticism over the possibility of Job losses and a rise in the cost of living due its cost. And it is happening now. As most protesters of the carbon tax have said implementation of such will be a burden to majority of households and industries.

There is an increase in prices but we do not get an increase in our salary. Some employers would rather pay minimum Just as so they can also cover expenses for carbon tax. Not only that with the additional company cost that carbon tax brought to Industries these can also cause loss of Jobs for most people and loss of Job opportunities for graduating class. Most like this will happen because management Nould rather want loss of people in the company than losing money.

They may not be able to pay wages anymore. Companies would rather invest on machineries that are fuel efficient. And most business may soon invest in a country where no carbon tax is being imposed. In an administrative manner, The Australian government has implemented a direct market-based approach to reduce emissions through a carbon ax and future emissions trading scheme (ETS), which in effect will have an impact on the economy through the relative price of goods and services.

The big fuel users will price the additional costs from the carbon tax into their products, creating an opportunity for businesses to develop a carbon-free or low-carbon goods and services that avoid the tax and are cheaper than carbon-intensive substitutes. The additional cost for carbon tax will be passed on to consumers thus creating a rise in the cost of living for most household. It will be a burden especially those with low ncome and for those who rely only The change in relative prices will lead Australian industries to shift away from high-carbon products towards energy-efficient processes and low-carbon inputs.

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