Australia’s carbon tax is an important piece of the puzzle

The carbon tax that was announced in April by Treasurer Scott Morrison and his Treasurer’s Department will reduce Australia’s emissions by more than 40 per cent by 2030, according to the Department of Environment.

The Government said the $2.50 per tonne carbon tax will be introduced in the coming weeks and is expected to generate revenue of $30 billion.

In the interim, the Government has committed to spending $10 billion to improve roads and public transport, including $10.4 billion over five years to improve Melbourne’s rail network and $8.2 billion over two years to build and upgrade the city’s water infrastructure.

It is also committed to spend $15 billion over three years to reduce pollution from the coal-fired power station at Flinders Street Station and other major power plants in Melbourne’s inner-city.

The Government also plans to increase the amount of energy generated by the national electricity market by more 1.5 per cent over the next four years to provide better price signals for consumers and to reduce the cost of the carbon tax.

The carbon tax was introduced in April, after which the Government announced it was considering changes to the tax, including capping emissions at 300 grams of CO2 per ton of carbon dioxide.

A carbon tax capped at $10 per ton would cost households $5 more a year.

“The carbon price will have to be kept low, so it’s not just a $1 increase.

The $2-a-tonne carbon price would be a big boost,” Mr Abbott said.

Key points:The carbon-tax announcement is the result of extensive consultation with stakeholders, including community groups, industry and local governments, as well as the Victorian Government, Mr Abbott saysThe carbon levy will be phased in over four years, with the highest prices starting at $2 a tonne and ending at $15 per ton, and the lowest price starting at half a ton and ending the same as the $10 priceThe Australian Capital Territory will take over the responsibility of implementing the carbon-pricing system nationally and regional government will provide funding for infrastructure, the state’s environment minister saysThe announcement comes after months of discussion between the Federal Government and Victoria’s environment ministry.

Under the proposed carbon tax, households will be required to pay $2 per kilogram of CO 2 per year, which is higher than the $1.25 per kilo of carbon currently taxed, but lower than the Federal carbon levy that was introduced last year.

Mr Abbott said the announcement was a key part of the Government’s plan to ensure the price of electricity was communicated to all consumers.

“I think it’s important to understand that it’s a carbon tax not just in terms of the amount you pay but also in terms what you get in return for the carbon,” Mr Morrison said.

“What we’re proposing here is a much more efficient way of managing the price.”

The emissions that are being reduced in Australia are going to be made up by carbon taxes, not just the carbon taxes that are now going to go up.

“[It’s] not just going to mean $2, $2 and $2 [per tonne] or $4 per ton.

You’ll have to make it more transparent, you’ll have more choices.”

He said the carbon price could be “a significant boost” to regional Victoria’s economy and said the government was looking to regional areas to provide the infrastructure needed to deliver this plan.

“We’re going to have to spend money in the Northern Territory, Victoria, NSW and South Australia,” he said.

The announcement was welcomed by Victoria’s Environment Minister, Adam Bandt, who said it showed the Government was committed to delivering a sustainable and effective system.

“It shows that Victoria has a strong vision and it shows that the Government of Victoria is determined to achieve its goal of achieving a 100 per cent renewable energy target,” he told the ABC.

“And it shows the Government is prepared to go where the evidence leads, not where it’s been done.”

The State Government said it was not expecting the carbon levy to generate a significant impact on its business.

“Victoria will have an effective carbon price, and we will use it to meet our targets, we will utilise it to increase our investment in renewable energy and we’ll utilise the carbon to ensure our electricity price remains affordable,” a spokesman said.

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