Australia will adopt carbon trading scheme

While the European Union’s carbon trading scheme remains frozen following protest by airlines across the globe, Australia has said it will be scrapping its current carbon tax and switch over to the emissions trading scheme similar to that of the European Union.

Qantas is one of some 300 companies affected by the carbon tax.

Photo Oscar Siagan/The Age

Photo Oscar Siagan/The Age

Australian Prime Minister Kevin Rudd said the new scheme would reduce the cost from the current A$25.40 (US$23.42) per tonne to about A$6.00 per tonne, and hopefully the benefits would be passed on to consumers. While the tax is a penalty levied on companies for not being green enough, it is inevitable that the higher cost eventually finds its way to pinch the consumer’s pocket.

It is not clear how the trading scheme, if implemented, will affect Australian and other airlines operating to and from Australian destinations; the universal application of the EU scheme has drawn objection from foreign carriers. Australia may yet have the benefit of learning from the outcome of the EU’s review expected by November – if it comes then – before its own implementation, which will be formalized after the nation’s elections for which a firm date has yet to be fixed. But, only if the Labour party continues to govern the country, for the opposition leader Tony Abbot has said he would do away with a price on carbon altogether if the Conservative party won.

Mr Abbot called the emissions trading scheme a “so-called market in the non-delivery of an invisible substance to no one.” He added: “It’s been absolutely obvious that the world is not moving towards taxes, whether they’re fixed rates or floating taxes.”

Whether it is good or bad news, it is a complex issue. Mr Rudd said the rationale for the termination of the carbon tax in favour of the EU-style trading scheme is “the reduction of costs for small businesses” although the penalty is really one imposed on the big polluters. Whatever the tax mode, the consumer will bear the brunt of the cost. The question is: How much? The trading scheme as introduced by the EU, however, is also aimed at encouraging affected companies to be more efficiently green – they may even gain from the trading. The problem is that most companies are diffident about that benefit and more concerned about the penalty.

So far the International Civil Aviation Organization which has been entrusted with the task to propose an alternative scheme to the EU’s scheme by November has not reported on any significant progress in its review. Do not be surprised that it will be a long time coming, although the EU has said that short of that, it intends to push ahead with its original plan. But if the delay does happen, it would be interesting to see if Australia would take over the lead.

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About Dingzi
Writer by passion, with professional expertise in aviation, customer service and creative writing. Aviation veteran, author, editor and management consultant. Besides commentary on business issues and life-interest topics, travel stories and book reviews, genres include fiction, poetry and plays. Nature lover who abhors cruelty of any form to animals, and a tireless traveler. Above all, a dreamer.

One Response to Australia will adopt carbon trading scheme

  1. Nice post ! Its a very informative post, I Liked it ..

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