The Australian Emissions Trading Scheme

This essay has outlined all the current positive aspects of Australian society, but we need to address the future and the sustainability of our environment for our grandchildren. The federal government is addressing this issue by introducing a carbon-trading scheme. This carbon trading scheme, where the tax on carbon producing goods and services go into a positive influence on the environment, for example planting trees. The Australian government is following leads by other countries in this circumstance.

The regulatory constraints on businesses from government have been subdued recent years. Fulfilling the function of the state, Prime Minister Tony Abbott’s government proposed a new climate policy that the government will put off the existing levy on emitters and set up fund with as much as $2.6 billion to subsidize the mining enterprises in cutting green-house gas emissions (Anderson, Scott 2014). The subsidy released the financial burden of carbon tax which cost BHP $77.5 million in 2013 (Financial Review 2014) as an enabler in mining industry (Conrad 1993).

A cap-and-trade program sets a maximum level of pollution, and distributes emission permits among firms that produce emissions (Carbon Tax, 2013). The purpose of which is regulation of specific emissions by stationary and mobile sources, and setting a specific level which all emitters are re-quired to meet. Cap-and-trade possibly has less of a direct economic component to it than the other alternatives to reducing emissions described due to the ability to trade permits versus the expendi-ture of resources improving technology, with some arguing it is to the detriment of the environment. As stated in the article found in Reclaiming the Environmental Agenda, by Ashford, N. et al., 2008, “being a market-based instrument, ‘the cap-and-trade option suggests that at least this form of MBI may be more environmentally effective than the usual command-and-control alternatives, in addition to being more economically efficient.” (Ashford, N. and Caldart, C., 2008, p. 908).

Countries around the world have agreed that to avoid potentially dangerous climate change, global warming stay below 2 degrees C. This means that every country, including Australia will need to significantly increase their efforts to reduce emissions. Currently, Australia’s per capita emissions are among the highest in the world, however, there has been recent progress in decarbonising its economy. For example, greenhouse gas emissions have remained stable while economy size has almost doubled. (Pathways to deep carbonisation).

However, the Action Plan is not likely to produce 9.8 Mt in new reductions by 2020, as the government stated. For example, the government claimed that using Greenhouse Gas Reduction Account funds to subsidize electricity prices which would produce 3 Mt in emission reductions. We found no evidence to support this claim and concluded that subsidizing electricity rates is not an acceptable use of these funds. Fortunately, the government is no longer proposing to divert Greenhouse Gas Reduction Account funds in this way.

First we should understand how the carbon cap and trade system came about. The system of carbon cap trade used to be known as ‘emissions trading’, the alliance of free-market republicans and renegade environmentalists got the system adopted as national law in 1990 as a part of the Clean Air Act, to control the power-plant pollutants that cause acid rain, which is triggered by vast clouds of sulfur dioxide

Limiting emissions requires broad-based action across many sectors of the global economy. Australia’s air temperature has risen 0.9°C since 1910, illustrating the Global Warming due to the emissions of greenhouse gases. Australia has numerous initiatives that provide its population with tips on how to help the environment. Unlike many industrialized nations Australia is still heavily reliant on Non Renewable Resources such as coal. Australia and Japan have both signed the Kyoto Agreement which aims to reduce greenhouse gas emissions. Japan signed it in 2002, whereas Australia signed it in 2007. The time of which both countries signed, illustrates that Japan was more acceptable and ready for such a scheme and to do something about greenhouse gases. Japan was ranked 12th out of 176 countries in a 2013 Global Sustainable Competitiveness Index. Japan ranked 4th in Sustainable innovations which entails providing quality education, cultivating research and development, creating globally competitive products and services, and providing jobs and income for the population of a country recognised as environmentally sustainable. Although Japan has achieved this position, the country has a substantial amount of air pollution from power plant emissions which results in acid rain. The acidification of rain damages lakes and reservoirs whilst degrading water quality and threatening aquatic life.

In Australia, there is an emerging consensus that the government should take further actions to help mitigate and combat climate change. The current most accepted policy by government is the introduction of a carbon tax followed by an ETS in 2015. However we are focusing on the carbon tax in this essay and not the ETS. Here is a brief explanation of the dynamics of a carbon tax. A carbon tax is a tax on energy sources, which emit carbon dioxide (Co2). Therefore, carbon taxes address the problem of negative externality. Externalities are the subsequent effects when individual production or consumption of a particular good or service imposes costs or benefits on others. Therefore negative externalities are effects, which pose harm to others without their direct interaction (Basic Economics 2011). However, usual market practices and transactions do not reflect these cost and benefits in the prices involved in the transaction, or take into account in their transaction decision. Therefore this is a form of market failure. By imposing a cost on these negative externalities, the hidden cost can be addressed. Ultimately the purpose of a carbon tax is to reduce emissions of carbon dioxide and therefore reduce

NGS integrates greenhouse into other major policy initiatives, such as the Natural Heritage Trust, and launches new measures to increase greenhouse emission reduction activities across the Australian community. It provides the strategic framework for an effective greenhouse response and for meeting current and future international commitments. It will provide a fresh impetus for action by governments, stakeholder groups and the broader community and set directions for that action into the next century.

In February 2011, the Australian federal government declared a scheme to implement a Carbon Tax from July 1, 2012. Implementing this scheme has generated a controversial debate between Australians. The term “Carbon tax” refers to an environmental tax forcing polluters to pay per ton of carbon which they release into the atmosphere. This essay will provide the economical, social and political implication of carbon taxes, also with its introduction who will benefit and who would suffer.

However, the Gillard government has instituted one fairly radical and controversial policy: the new imposed carbon tax which took effect on July 1, 2012. The tax requires 500 of Australia's top polluting companies to "pay a fixed price, starting at Aus$23 per tonne, for their carbon dioxide emissions for the first three years. The mechanism would then shift

In the second evening lecture, Elizabeth Beale spoke about eco-fiscal policies with a focus on carbon pricing. According to Beale, increasing carbon emissions are not only harmful to the environment but also create several negative externalities such as damaging crops and higher health costs. For this reason, carbon pricing would help to shift these costs back to those who are responsible. Beale proposes two options for carbon pricing,, a carbon tax or a cap-and-trade system. A carbon tax is simpler as the government sets a price for greenhouse gas emissions. A cap-and-trade system is more complex as allowable emissions are capped, and then the government distributes emissions permits, which are tradable. Beale claimed that no one system is more superior than the other, especially as the differences between the two get blurred as more jurisdictions are adopting more blended systems. Beale concluded her lecture by looking at the current carbon pricing policies implemented throughout Canada. In British Columbia, a carbon tax of $30/tonne was implemented in 2008, which caused fuel use to drop by 16% from 2008 to 2013. In Quebec a cap-and-trade system was implemented in 2012 that covered 85% of emissions with the goal to reduce emissions to 25% below 1990 levels by 2020. However, despite the action on carbon pricing in these provinces, the Atlantic Canadian provinces have yet to implement any type of policy.

Since the beginning of the industrial revolution machinery and surface temperatures have been on the rise. Some may argue that the increasing temperatures are strictly due to the rise of machinery and less strict efficiency standards. The U.S has been debating what methods are efficient for combating increasing emissions some argue that a carbon tax has many positive impacts some say if one were to be adopted they would need reforms. This paper will dive deep into the the effects of climate of change and whether or not a carbon tax can fully help to decrease these emissions.

Environmentalists are quick to sing out about New Zealand’s excessive greenhouse gas emissions – and rightly so. In the large part, we are a gas-guzzling, river-polluting, plastic-bag-wasting country. But the rules of international trade means cutting back on production in our worst-emitting industry probably won’t work, or at least not yet.

Pollution, specifically global warming, is of growing concern to people and governments. It is a controversial issue whose validity is still being debated by scientists. The Kyoto Protocol is an international attempt to address global warming through emissions controls. Traditional neoclassical economic models do not incorporate pollution in rudimentary theories of supply, demand, or pricing, as a result, firms do not consider pollution as a cost of production, which leaves government regulation as the primary method for controlling these externalities. The goal of emissions trading is to allow one business, which can make greenhouse gas emission reductions for a relatively low cost, to sell