Recently, Australia made a controversial decision to impose a carbon tax on its 500 biggest polluters. Despite causing quite a stir in the public, the government’s decision to put a price on pollution is a bold moving in a changing world economy. But how does Australia’s carbon tax match up with other countries?
The European Union, often known for its progressive stance regarding the environment, is also the host of the largest multinational emissions trading scheme (ETS). Polluters may pollute only within their unit allowance or otherwise purchase carbon credits from other polluters. The EU imposes steep penalties on polluters who emit more pollution than they possess carbon credits for. Although the EU’s emissions trading scheme has come under fire recently for encouraging fraud and profiteering, it still remains an ambitious climate policy and has led to overall carbon emission reductions across the continent.
China, frequently chastised for being the world’s biggest emitter of CO₂, has recently developed some very aggressive carbon reduction plans. It intends on cutting emissions by 40-45% by 2020 through the large-scale adoption of a national emissions trading scheme. The ETS would be deployed in six regions by 2013 and countrywide by 2015. In conjunction with its ambitious solar energy plans, China is on track to becoming both the world biggest and cleanest economy.
Next on the list of emerging economies would be India, which has set emission levels for 563 of its biggest polluters. Polluters that surpass their threshold must purchase additional credits on the carbon market, which is set to be implemented in 2014. In addition to the ETS, India has also imposed a countrywide carbon tax at 50 rupees/tonne ($1.07/tonne) on coal produced in and imported to India.
The United States, after months of bickering and partisan games has absolutely nothing to show for its plans for a carbon ETS. The bill introducing a cap on carbon was shot down in the Senate after heated debated from both sides. This news does not bode well for the world’s second largest emitter of CO₂. However, perhaps there is reason to be optimistic about the efficacy of Emissions Trading Schemes imposed at the state-level. Despite some initial delays, the state of California seems on track to implement its own cap-and-trade system.
Therefore, although Australia’s recent plans to impose a carbon tax have stirred up a frenzied public debate, pricing pollution seems to be where the most environmentally progressive countries are going. Rather than seeing it as a detriment to growth, Australians should see it as an opportunity to embrace cleaner development while giving a much needed boost to the country’s green economy.
Image CC licensed by lollerkeet: Coal train, Australia