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Australia Is About To Have A Totally Reasonable Climate Policy Australia's Julia Gillard Introduces Carbon Tax, Puts $10 Billion Toward Clean Energy

Want to put a price on carbon? Australian Prime Minister Julia Gillard shows how it's done.


Julia Gillard, Australia’s prime minister, did not want to tax carbon. But over the weekend, about a year into her first term, she announced the terms of a carbon-pricing program. Starting next year, carbon will cost $23 per metric ton in Australia.

In the United States, to utter the phrase “carbon tax” is to invite political death, and Gillard’s plan is the sort of policy that U.S. politicians have all but given up on. But it’s not much more popular in Australia: right now about three-fifths of voters oppose the tax. Unlike President Obama, however, Gillard took a deep breath and bet that her powers of persuasion and political acumen could win over her constituents. The result is a forward-looking policy that shows what a little political courage can do to fight climate change. The president and Congress would do well to follow her lead.

Australia is not an obvious place to push for a carbon tax. It has a wealth of coal, and 80 percent of its electricity comes from coal-fired power plants. Its total emissions rank it among the world's worst carbon polluters, and it produces more carbon per capita than even the United States. In 2009, its parliament twice rejected carbon trading schemes. As in the United States, Australia’s mining, travel, and farming industries have pushed back against the plan, and conservatives are warning that the carbon tax will kill jobs and drive up prices for consumers. In the face of this political reality, Gillard has drawn up a plan that puts her country on track to create a carbon market second only in size to the European Union’s. She has also lined up the votes necessary to ensure the plan’s success: the main planks of her policy are certain to pass.

Climate campaigners in Australia have been quick to say that this policy is not perfect. It subsidizes the costs that the most polluting industries will face. It will rely on the imperfect answer of carbon off-sets to meet its initial goals. But it’s going to force Australia to grapple with the real costs of its coal-heavy electricity system. It’s going to support clean energy development with $10 billion of financing that the government can loan to cutting-edge firms or use to buy equity shares in creative companies. (For some perspective, the United States only invested $300 million for energy investment next year.) The deal also puts $200 million into a clean technology innovation program, and $946 million into a biodiversity program to guard Australia’s natural resources.

Gillard’s change of heart on the carbon tax grew from political realities: her party needed to ally with the Greens in order to govern. But if she can convince Australians to embrace these climate-friendly measures (or at the very least get them to admit that putting a price on carbon isn’t the end of the world), she will have done a great service to leaders around the world by proving that supporting carbon pricing is not the policy of a political fool but of a visionary leader.

Photo via the U.S. House of Representatives


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