Australia drops its CO2 pollution tax

AUSTRALIA’S government has repealed a controversial carbon tax on the nation’s worst greenhouse gas polluters, ending years of contention over a measure that became political poison for those who imposed it.

Hazelwood power station burns brown coal to produce a quarter of Victoria's electricity, but is also a major producer of carbon dioxide. Picture: Getty

The senate voted 39 to 32 to axe the A$24.15 (£13.30) tax per metric tonne of carbon dioxide that was introduced by the centre-left Labor government in July 2012.

Conservative MPs burst into applause as the vote tally was announced.

Prime minister Tony Abbott’s conservative coalition government rose to power last year on the promise of getting rid of the tax, assuring voters that removing it would reduce household electricity bills.

He plans to replace the measure with a taxpayer-financed A$2.55 billion fund to pay industry incentives to use cleaner energy.

Australia is one of the world’s worst greenhouse gas emitters per capita, largely because of its heavy reliance on the nation’s vast reserves of cheap coal for electricity.

For example, Hazelwood Power Station, Melbourne, pictured above, is fuelled by brown coal and in 2005 was labelled Australia’s least carbon efficient power station by WWF Australia.

The carbon tax, charged to about 350 of Australia’s biggest carbon polluters, was controversial from the start.

Former prime minister Julia Gillard had initially vowed not to introduce a tax on carbon emissions.

But after her Labor Party was elected in 2010, she needed the support of the minor Greens party to form a government – and the Greens wanted a carbon tax.

Ms Gillard agreed, infuriating a public that viewed the measure’s imposition as a broken promise.

Labor’s popularity plummeted, particularly when consumers saw their power bills soar.

In reality, the tax accounted for a relatively small portion of that increase, but many blamed it nonetheless.

In a desperate bid to improve their standing with the public, Labor replaced Ms Gillard with previous prime minister Kevin Rudd, who promised to get rid of the tax and transition it earlier than planned to a cap-and-trade scheme, which would have significantly lowered the per-tonne carbon price. But it proved too little, too late. Mr Abbott’s party swept to power in last year’s elections by vowing to get rid of the tax for good.

In a fiery speech ahead the vote, Senator Christine Milne, leader of the Greens, called it an “appalling day for Australia”.

“A vote for the abolition of the clean energy package is a vote for failure,” she said.

“If this parliament votes to abandon the clean energy package, you are voting against the best interests of the nation.”

Opposition leader Bill Shorten lashed out at Mr Abbott after the vote, dubbing him an “environmental vandal”.

“Today Tony Abbott has made Australia the first country in the world to reverse action on climate change,” Mr Shorten said in Canberra.

“History will judge Tony Abbott very harshly for refusing to believe in genuine action on climate change. Tony Abbott is sleepwalking Australia to an environmental and economic disaster.”