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Climate tax about-face

By Jonathan Verschuuren (TLS)

10 March, 2011

The news this past week in Australia has been dominated by the government’s plans to introduce a climate tax. The proposal has provoked something of a storm. Politics and the media here in Australia are rather more polarized and populist compared to the Netherlands. Scenes that you might expect from Fox News are part and parcel of Australian TV’s daily offering. Opposition leader Tony Abbott is milking all the drama he can out of the situation, even in parliament. He says he will fight the carbon tax every minute of every day of every month of his political life. The Prime Minister, Julia Gillard, has been called a liar by a TV journalist; he came up with a nickname for her that I’m sure he thinks is really funny: “Juliar Gillard”.

What’s going on? The Labor government of Australia wants to assign a monetary value to greenhouse gas emissions as a financial incentive to reduce emissions of these compounds. A system of emissions trading was chosen for this purpose. We’ve been using a similar system in the EU since 2005. Businesses must see to it that they have enough emission trading rights. If they have a surplus of rights due to the introduction of energy-efficiency measures, for example, then they can sell them. Companies can also earn tradable rights by investing in clean energy in other countries (e.g. by financing a hydroelectric plant in a developing country). This makes reducing greenhouse gas emissions interesting from a financial point of view. Emissions trading systems like these are very complex, however, and it takes time to get them set up. This is why it has been decided to introduce a fixed price for CO2 emissions until 2015, and to let the market determine the price thereafter. The system will initially function as a fixed fee, or tax. All this has been proposed even though Gillard promised in her election campaign last year that she would tackle climate change, but not through fiscal means…


Sydney, 22 February 2011

By Jonathan Verschuuren (TLS)

At the end of my three-year term as vice dean of Tilburg Law School on 1 January 2011, my family and I headed down under for a six-month research sabbatical at the University of Sydney, at the Australian Centre for Climate and Environmental Law (ACCEL) to be precise. In the weeks we have been here, this country has been hit by its worst-ever floods, the worst cyclone in living memory, a record-breaking heat wave and fierce forest fires. The impact of climate change is huge here, and climate law and policy are consequently the focus of a great deal of attention. There is even a separate Ministry of Climate Change and Energy Efficiency, which in itself is an indication that the importance the government attaches to this theme is quite different from that in the Netherlands. Yet there is still a great deal to be done. Unlike in the Netherlands, for instance, a start is only just being made on earmarking flood areas along major rivers. It took the severe flooding in Queensland in January to get that far. Moreover, Australia holds huge reserves of coal, which is complicating the debate on the transition to sustainable energy.

Over the next few months, together with my new ACCEL colleagues, I will concentrate on the new, fascinating and rapidly-evolving legal discipline of climate law. I shall focus on adaptation, in other words adapting society to the changing climate. In order to be able to deal with the changes we will face over the next few decades, initial signs of which are already visible, far-reaching global measures are required which involve many legal issues. This blog will look at these issues in more detail over the next few months.

Category: Australia, Climate

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