Combet Sees Progress in Talks on Setting Australian Carbon Tax

Australian Climate Change Minister Greg Combet said he expects to conclude details of a plan for a carbon tax today after making progress in talks with lawmakers.

The Multiparty Climate Change Committee, which includes the minister and lawmakers, met in Canberra yesterday and today to try to formulate the country’s first carbon policy. Prime Minister Julia Gillard’s government wants the levy to begin in July 2012 in preparation for a trading system that could be operating as early as 2015 in Australia, a country that burns coal to generate more than 80 percent of its electricity.

“There are issues we’ve made progress on, others that we’ve got a fair way to go but it’s been approached in good faith and at the end of the day we’ll make an announcement,” Combet told Channel 10 television’s “Meet The Press” program today, adding that he anticipates agreement “on all the elements.”

Australia, the world’s biggest coal exporter, has set a target of generating 20 percent of the nation’s energy from renewable sources like wind and solar by 2020. Finance Minister Penny Wong said today the carbon tax plan is “a big reform” and “a pretty tough sell” to businesses.

The Australian Chamber of Commerce and Industry today reiterated its opposition to the carbon tax plan. It also rejected the Business Council of Australia’s proposal this week for an introductory tax of A$10 per metric ton.

Full Compensation

The council, a group that consists of chief executive officers of Australia’s top 100 companies including BHP Billiton Ltd. and Rio Tinto Ltd., made its proposals in a submission to the government on May 27. It also suggested that businesses should initially receive full compensation for the tax to ensure Australia’s policy to price greenhouse gas emissions doesn’t affect trade and investment.

Details of the government’s carbon tax plan will be released by early July, including compensation to households and businesses and funding for clean energy projects. Combet said today that more than half of the carbon tax revenue will be used to compensate households.

The annual impact on households of an A$30 per ton carbon price, excluding petrol price concessions, would be A$863.20, according to preliminary Treasury estimates released on April 1 under an Australian Freedom of Information Act request. At A$20 a ton the cost would be A$577.20.

“It’s a real pity in this country that we’ve been discussing this for so many years,” Wong said today in an interview with the Sky News television. “Remember, the Business Council of Australia, I think it was in 2006, pushed the former Prime Minister John Howard toward a carbon price. We’re in 2011 and we’re still having an argument about whether it’s a good thing to do.”

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