What Is The Carbon Tax Exactly?

There’s been so much talk over recent weeks about the Government’s new carbon tax and the effects that it will likely have on the average Australian household. But what exactly is the “Carbon Tax”?

From July 1st 2012, the nation's top 500 carbon producers will have to pay $23 per tonne of carbon emissions, rising at 2.5% per year. The idea is that these companies will feel compelled to reduce their carbon emissions significantly to avoid paying as much in tax and therefore reduce Australia’s overall carbon emissions.
 
In theory, the idea is to make greener choices to avoid the tax, but in reality, especially in the short term whilst companies work out what will be more cost effective for them, consumers are going to pay dearly because companies expecting to pay the tax will almost certainly increase the costs of their products in anticipation.
 
2010 was the year of carbon pollution with an estimated record of 30.6 Gigatonnes of carbon emissions produced worldwide. If we consider Australia to produce just 2% of that figure, that’s 61.2 million tonnes. We don’t know what percentage the top 500 Australian carbon polluters would produce, but it’s a pretty big financial pie to take a slice out of, and the lost revenue from companies will need to be found somewhere.
 
According to the Clean Energy Future website, 9 out of 10 Australians will be financially compensated to help them cope with the increased prices, and 7 out of 10 will be fully compensated either through tax cuts or increases to family payments. It also states that funds from the carbon tax will also go towards helping Australia’s high polluters move over to greener practices.
 
Taking everything into consideration, we all want to live greener lives and leave a clean environment for future generations, but is the cost to “go green” going to be more than we can afford?
 
What do you think about the carbon tax?

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