Thursday, February 24, 2011

The future starts in July 2012 - The agreement on carbon tax


The Prime Minister Julia Gillard today outlined the Government’s plan to cut pollution, tackle climate change and deliver the economic reform Australia needs to move to a clean energy future.

This is an essential economic reform, and it is the right thing to do.

The two-stage plan for a carbon price mechanism will start with a fixed price period for three to five years before transitioning to an emissions trading scheme.

The Government will propose that the carbon price commences on 1 July 2012, subject to the ability to negotiate agreement with a majority in both houses of Parliament and pass legislation this year.

A carbon price is a price on pollution. It is the cheapest and fairest way to cut pollution and build a clean energy economy. The best way to stop businesses polluting and get them to invest in clean energy is to charge them when they pollute.

The businesses with the highest levels of pollution will have a very strong incentive to reduce their pollution.

The Government will then use every cent raised to:

. Assist families with household bills

. Help businesses make the transition to a clean energy economy

. Tackle climate change

The Government will not shy away from this difficult but vital economic reform to move Australia to a clean energy nation.

The global economy is shifting.

Right now, Australia is at risk of falling behind the rest of the world. The longer we wait, the greater the cost to the economy, and the greater the cost to Australian jobs.

An initial fixed carbon price will provide businesses with a stable and predictable platform to transition to a ‘cap and trade’ emissions trading scheme that will be linked to international carbon markets.

This will give businesses time to understand their carbon liability and begin the transformation in a steady and purposeful way.

Today’s proposal is the result of hard work by the Multi-Party Climate Change Committee which has been meeting co-operatively, determined to help deliver this crucial economic reform.

The framework has been agreed by Government and Greens members of the Multi-Party Climate Change Committee (MPCCC). The other members, Mr Tony Windsor and Mr Robert Oakeshott, have agreed that the proposal should be released for community consultation.

The Committee will continue to discuss other important elements of the proposal including the starting level of the fixed price, any phasing in of sectors of the economy, and assistance for both households and industry.

The document outlining the proposed carbon price mechanism is attached.

Members of the public and interested parties who wish to provide input on this approach should contact:, or write to:

The Multi-Party Climate Change Committee Secretariat
GPO Box 854
Canberra ACT 2601

MPCCC Carbon Price Mechanism Final

"The Australian Greens today joined the Gillard government in announcing an agreed pathway towards a carbon price that should commence on July 1, 2012, beginning the transformation of our economy from polluting fossil fuels to clean energy.

The agreement is a major step towards implementation of the Greens' proposal for a fixed carbon price starting as soon as possible, rising each year, with no international offsets allowed. The fixed price could be replaced in time with a well-designed emissions trading scheme.

“This agreement is the Greens in action, delivering certainty to the Australian economy, community, investors and the environment after productive negotiations with the government,” said Australian Greens Leader, Senator Bob Brown.

“We proposed a fixed price on carbon in January last year as a way of breaking the deadlock the parliament had reached on climate action.

“The Multi-Party Climate Change Committee that was established at the instigation of the Greens to support the Gillard government, is paying dividends for all Australians.”

Australian Greens Deputy Leader, Senator Christine Milne, said “This agreement to set a fixed, rising price on carbon with no international offsets means that, as of July next year, the transformation of our economy towards a zero emissions future can begin.

“This will be good for the community who face out-of-control energy price rises, it will stimulate the economy, create jobs and, of course, help protect the climate which sustains us all.

“The Greens' agreement with the government sets out elements of a transition to emissions trading down the track once the parliament can agree on emission reduction targets.

“But it is important to note that, in the absence of agreement, the fixed price would continue and keep rising into the future, giving industry certainty that, from now on, change is inevitable.

“The carbon price would cover the energy sector, transport, industrial emissions and waste. There is agreement to support change in the land-use and forestry sectors but details are still under consideration.

“The agreement sets out points for compensation, including helping the community meet rising costs of living, but the details are still to be determined.

“This is a big step forward for climate action in Australia. For the first time, everybody in Australia will have a clear signal that the old, polluting ways will have to change and a new, exciting era is set to begin.”

Related Posts

. Get set for higher power prices, with or without a carbon price

. Don't do it! Julia is walking into a carbon trading trap

. Earth to supporters of an ETS - we have a problem