Cameron Hepburn

21 October 2010

Greening Oz – The Economist

Cameron Hepburn

The government considers a carbon tax

EVER since she was elected prime minister six weeks ago, Julia Gillard has been under pressure to restore the ruling Labor Party’s credibility on climate change. Relying on coal to generate about 80% of its electricity makes Australia one of the biggest greenhouse-gas emitters per head. Labor’s decision to abandon an earlier pledge for a European-style emissions-trading scheme (ETS) cost it seats at an election in August. Ironically it also left Ms Gillard relying on support from the Australian Greens to form a minority government.

In Australia, such measures represented an effective carbon tax of $1.70 per tonne—a figure 17 times lower than in Britain and eight times lower than in China, on the basis of a perhaps-generous interpretation of China’s efforts to make its coal-fired power stations more efficient. Only South Korea’s hidden carbon price of 70 cents was lower. One of the report’s authors, Cameron Hepburn, reckons that China will “almost certainly” adopt a national ETS or some alternative measure before Australia does.