Australian parliament votes to impose a carbon tax – Are you happy with that?

Essays by Eric Worrall

Raise your hand who wants to invest in Australia?

Australia will have a carbon price for industry – and it could pass on greater climate action to the entire economy

Published: March 30, 2023 12:44 pm AEDT

Frank Jotzo
Professor, Crawford School of Public Policy and Head of Energy, Institute of Climate Energy and Disaster Solutions, Australian National University

Australia is about to take a big, constructive step forward on climate change policy: we will have a carbon price for industry, under a safeguard mechanism.

It comes nine years after the Abbott Coalition government abolished Labor’s carbon price. The protection mechanism lay dormant for years – largely codified under the Coalition government, but left in place inefficient due to the way it is done.

This mechanism will become effective with the so-called “facility and credit program”, placing a price signal about 30% of Australia’s greenhouse gas emissions. It would provide a significant financial incentive to cut industrial emissions, although it also relies on land-based carbon offsets.

Under congressional compromise this week between Labor, the Greens and some opponents, the law will provide that overall emissions from industrial facilities covered by this scheme must not increase over time.

The implementation of the safeguard mechanism bodes well for future climate policy in Australia. The policy did not receive bipartisan support, but Dutton’s opposition did not speak out about it.

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Read more: https://theconversation.com/australia-will-have-a-carbon-price-for-industry-and-it-may-infuse-greater-climate-action-across-the-economy-202728

If the imposition of a carbon tax by itself is not enough to destroy coal and gas, the fact that green parties are bragging about the agreement to pass a carbon tax has made future coal and gas projects a lot more difficult;

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Make it harder to finance coal and gas | The norms will also be applied to many government agencies. Notably, agencies such as Export Finance Australia, Infrastructure Australia and the Northern Australian Infrastructure Fund will now have a harder time supporting new coal and gas.

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Read more: https://greens.org.au/climate-crisis

These new costs and attacks on corporate profits are being imposed in what the World Bank describes as a “second year of slowing growth.”

Second year growth slows down

Global growth is projected to slow to the third weakest pace in nearly three decades, eclipsed only by the global recession in 2009 and 2020. Investment growth in emerging markets and economies developing economies are projected to remain below the average of the past two decades. Any additional adverse shock could push the global economy into recession. Small countries are particularly vulnerable to such shocks because of their dependence on external trade and finance, limited diversification, high debt, and vulnerability to natural disasters. Immediate policy action is needed to spur growth and investment, including redirecting existing spending, such as farm and fuel subsidies.

Read more: https://www.worldbank.org/en/publication/global-economic-prospects

There’s an old saying, you catch more flies with honey than with vinegar. The politicians currently in power in Australia seem to be completely oblivious to how businesses make investment decisions.

The politicians in charge of Australia seem to really believe that punishing businesses with higher costs, new taxes and energy shortages (when gas runs out or coal plants shut down) will fix it. be their reluctance to invest in green technology.